Automotive
Parts markup looks good on paper. But when labor runs long and shop supplies add up, margins disappear fast.
The Bay Is Full But Where's the Money
You moved 40 cars through the shop last month. The bays were full. The techs were busy. Parts suppliers got paid. But when you look at the bank account, the profit you expected isn’t there. The work happened. So where did the money go?
Most shop owners know their parts markup. That’s the easy number. Labor is harder. You quoted three hours but the tech took four. The diagnostic that should have been straightforward turned into a comeback. The job needed a second pair of hands for twenty minutes. None of that shows up on the repair order the way it should.
Then there’s everything else. Brake cleaner. Shop rags. Waste oil disposal. The little supplies that add up to real money over a month. They get expensed when you buy them, not allocated to the jobs that used them. So your job margins look better than they actually are.
What Actually Eats the Margins
A repair order shows parts cost and labor hours billed. That’s what the customer sees. But your actual cost includes the tech’s time whether it matched the book rate or not. It includes the brake fluid and penetrating oil that got used. It includes the 15 minutes the service writer spent on the phone with the warranty company. It includes bay time when the car sat waiting for a part to arrive.
Without proper job costing, you can’t tell which types of work actually make money. That oil change package might be a loss leader that brings in bigger jobs. Or it might just be a loss. Brake jobs might look profitable but if comebacks eat into the margin, the numbers change. You need to see the full picture to price work correctly.
True Job Cost
True Job Cost
Parts, labor hours flagged vs actual, shop supplies, and sublet work all allocated to the repair order. You see what the job really cost, not just what you billed.
Vendor Management
Vendor Management
Multiple parts suppliers with different payment terms. Core returns that need tracking. Early payment discounts you might be missing. We keep accounts payable organized so nothing falls through.
Technician Pay Is Its Own Problem
Most businesses pay employees hourly or salary. Auto shops do something different. Flat rate techs get paid by the book hour, not the clock hour. A job that books at 2.5 hours pays 2.5 hours whether the tech finished in two or took three. Productivity matters. Flagged hours versus clock hours tells you how efficient each tech really is.
Some shops run hybrid systems. Base hourly plus flat rate over a threshold. Spiffs for selling alignments or fluid flushes. Commission on parts in some states. The payroll math gets complicated fast, and getting it wrong creates problems with your techs and with the state.
Flat Rate Payroll
Flat Rate Payroll
Flagged hours calculated correctly from repair orders. Productivity tracked per technician. Overtime rules applied properly even when pay is based on flat rate production.
Productivity Visibility
Productivity Visibility
See which techs produce the most flagged hours per clock hour. Identify where inefficiency is costing you money. Data you can actually use for scheduling and staffing decisions.
Run the Shop With Real Numbers
When you know your true cost per job type, you price work based on reality. You can look at that fleet account request and know whether the volume makes up for the discount or if you’re just giving away margin. You can decide which services to push and which to refer out because they don’t make sense for your shop.
Cash flow stops being a mystery. You know what’s owed to parts suppliers and when payments are due. Core returns get tracked and credited. Techs get paid correctly and on time. When tax season comes around, your books are already in order. And when you need financing for a lift or a scanner or an expansion, the financials are ready to show a lender.
Pricing Confidence
Pricing Confidence
Quote jobs knowing your actual margins. Adjust pricing on work types that aren’t covering their true cost. Compete in Metro Detroit on price when you can afford to, and know when you can’t.
Books Ready for Growth
Books Ready for Growth
Equipment loans, bay additions, second locations. Lenders want clean financials. We keep your books in shape so when opportunity comes, you’re not scrambling to organize two years of records.
Metro Detroit's Small Business Bookkeeper
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Tell us about your business and your current bookkeeping situation. We'll listen, answer your questions, and give you a clear quote.
