In short

Auto repair bookkeeping starts with the shop-management sales summary. Parts, labor, sublet, shop supplies and sales tax are recorded separately, card batches and checks are matched to deposits, and fleet, warranty and insurance balances are tracked as receivables. Parts purchases, returns and core credits are reconciled to supplier statements each month, so parts cost and gross margin are accurate.

Recording the sales summary

From your shop-management system's daily or monthly sales report we post:

  1. Labor revenue, separated by mechanical, diagnostic or body work if useful
  2. Parts revenue
  3. Sublet revenue for work sent to other shops, alongside its cost
  4. Shop supply and environmental fees
  5. Sales tax collected to a liability account

Card batches, checks and payments on account are then matched to the bank.

Supplier statements and cores

Parts suppliers send monthly statements full of invoices, credits for returns and core credits. We reconcile each statement to the books before it is paid, which catches missed credits and duplicate invoices, two of the most common leaks in a shop.

Receivables on account

Fleet accounts, extended warranty companies and insurers get an aging report. Payments are applied to specific repair orders, so you can chase the oldest balances first.

Comebacks and warranty work

Rework on a previous job has real cost but no new revenue. Tracking it in its own account shows how much comebacks cost each month.

Monthly outputs

A profit and loss with parts margin and labor gross profit, a receivables aging and reconciled supplier balances.

Key terms

Definitions for terms used on this page:

  • Debits and Credits: Debits and credits are the two sides of every bookkeeping entry; each account type increases on one side and decreases on the other.
  • Gross Profit: Gross profit is revenue minus cost of goods sold, before operating expenses.

Auto Repair Shops problems this addresses

  • Repair orders combine parts, labor, shop supplies and sales tax
  • Insurance and fleet customers pay on account, sometimes slowly
  • Parts inventory and cores are hard to track accurately
  • Technicians may be paid flat-rate, hourly or with incentives
  • Lifts, diagnostic tools and equipment loans need asset records