Auto Shops
Parts inventory and labor tracked per repair order. Shop management software reconciled to your books.
The Industry
Auto repair has two cost components that need tracking separately. Every job includes parts and labor, and the margins on each are different. A brake job has pads, rotors, and hardware at one markup, plus technician time billed at shop rate. Without separating these in your accounting, you cannot tell whether you are making money on parts, labor, or both. Most shop owners have a gut feeling about profitability but lack the numbers to confirm it.
The parts side alone creates complexity that other service businesses never deal with. You have parts bought for specific jobs, parts sitting in stock waiting to be used, cores that need returning for credit, and shop supplies that get consumed across multiple repairs but never show up on a customer invoice. Your shop management software tracks what goes on the work order. It does not always track what sat on the shelf for three months or what went out the back door without being charged.
Who This Covers
Who This Covers
General auto repair, transmission shops, brake and muffler specialists, tire shops, fleet maintenance, body and collision repair. Any automotive service business in The Woodlands or Greater Houston area dealing with parts inventory, technician labor, and repair orders.
What Makes It Complex
What Makes It Complex
Parts inventory that changes daily with purchases, usage, and returns. Labor tracking when technicians work flat rate or hourly. Core charges paid upfront that need follow-up for credits. Multiple revenue streams from repairs, maintenance, state inspections, and tires. Cash mixed with card transactions. Shop management software that needs reconciling to QuickBooks or your accounting system.
What We Handle
Parts inventory needs a system that ties purchases to usage. Parts bought for a specific job should hit cost of goods sold when the work order closes. Parts kept in stock need tracking until they get pulled for a repair. When a technician grabs a belt or filter from the shelf, it should move from inventory to the job. We set up tracking so you know what you have on hand, what went into completed work, and what might have been used without being billed.
Job costing shows profitability per repair order. Labor hours worked get compared to what was billed. Parts cost gets compared to what the customer paid. You can see which types of work generate healthy margins and which ones need repricing. We reconcile your shop management software to QuickBooks monthly so the revenue and expenses in your accounting match what actually happened in the bays. Tax preparation captures equipment depreciation on lifts and diagnostic tools, shop supply expenses, and vehicle costs that often get overlooked.
Parts and Inventory Tracking
Parts and Inventory Tracking
Inventory counts tied to actual job usage. Core charges tracked until vendor credits come back. Parts purchased for stock versus parts bought for specific repairs separated properly. Shop supplies allocated across jobs instead of expensed when purchased. Cost of goods sold that reflects what actually went into completed work orders.
Job Costing and Software Reconciliation
Job Costing and Software Reconciliation
Repair order profitability showing parts margin and labor margin separately. Labor hours compared to billed time identifying gaps. Shop management software reconciled to QuickBooks so the numbers match. Revenue and expenses categorized properly for meaningful financial statements and accurate tax returns.
What Goes Wrong
Parts walk off the shelf without getting billed. A technician grabs a hose clamp or can of brake cleaner for a job and nobody enters it on the work order. One clamp does not matter. But multiply that across fifty jobs a week for a year and you have thousands of dollars in parts that left without generating revenue. Without inventory tracking tied to work orders, you do not notice until physical count day reveals a gap between what you bought and what you billed.
Flat rate pay adds another layer of confusion. You pay technicians based on book time but the actual repair takes longer on a rusty vehicle or one with aftermarket modifications. If you do not track the variance between book time and actual time, you cannot tell whether your pricing needs adjustment or whether certain job types consistently lose money. Shop supplies get expensed when purchased rather than allocated to jobs, making some repairs look more profitable than they actually are.
Inventory Shrinkage and Unbilled Parts
Inventory Shrinkage and Unbilled Parts
Parts used but never charged to work orders. Core charges paid but cores sitting in the corner instead of going back to the vendor. Shop supplies consumed without any allocation to jobs. Physical inventory counts that do not match the system because usage was never tracked properly throughout the year.
Labor and Pricing Gaps
Labor and Pricing Gaps
Book time that does not match actual job conditions leading to underbilled repairs. Labor costs not compared to labor revenue by job type. Diagnostic time given away without being invoiced. Shop rates that have not been updated to cover current technician wages, rent increases, and equipment costs.
What Changes
You know what is on the shelf and what went into each job. Parts inventory ties to actual usage rather than just purchase dates. When the numbers do not match, you find out during monthly close instead of year-end inventory count. Jobs get billed completely because there is a system tracking what got used. Core charges get followed up so credits actually come back instead of sitting as unreturned parts in a corner of the shop.
Job profitability becomes visible. You can see which repair types make money and which ones need repricing or should be referred out. Labor efficiency shows whether book times are realistic or if certain work consistently takes longer than quoted. Shop management data reconciles to QuickBooks monthly so you are making decisions based on accurate numbers. Tax returns capture equipment depreciation, shop supplies, and all the expenses specific to running an auto repair business.
Inventory Accuracy and Complete Billing
Inventory Accuracy and Complete Billing
Parts usage tied to work orders so nothing goes unbilled. Core tracking ensures vendor credits come back. Shop supplies allocated to jobs giving accurate profitability per repair. Monthly reconciliation catching discrepancies before they compound into bigger problems discovered too late to fix.
Profitable Pricing and Clean Books
Profitable Pricing and Clean Books
Repair profitability by job type showing where to focus and what to reprice. Labor tracking identifying efficiency opportunities. Shop management software reconciled to accounting records monthly. Financial statements that reflect reality and tax returns prepared by someone who understands auto shop operations.
Greater Houston's Small Business Bookkeeping Partner
The Next Step:
A Quick Conversation
Tell us about your business and what you need help with. We'll listen, ask a few questions, and give you a straightforward quote.