Bookkeeping for Auto Repair Shops

You’ll work with a team of experienced certified QuickBooks Pro Advisors to help you get your books on track. You’ll also have a dedicated, certified lead accountant (with a four-year accounting degree and often more credentials) to answer all of your questions. Although all of these items end up putting more money into the owner’s pocket, they all have different tax attributes to them. Not ensuring that you have the most efficient structuring of these items could cost you thousands of dollars in both tax owed and the value of your shop.

These include a profit and loss report, a balance sheet report, and a statement of cash flow. The profit and loss report summarizes your income minus any expenses to show how profitable your business is in a given time period (week, month quarter, or year). To find time to grow your business, you need to get accounting and payroll off your plate and under one roof.

(In that case, looking at Tekmetric’s Parts Usage Report will give you a clearer picture). You pay the store a deposit for the bottle, then get it back when you bring the bottle back. We set up a process similar to returns for cores, to make sure the shops are getting the correct core credit.

The Best Auto Repair Accounting Software

Accounting can require a lot of data entry—an error-prone process made difficult by oil-stained receipts or cash payments accepted during late-night service calls. The best accounting software will vary based on your shop’s specific size, setup, and needs – along with your own preferences. We encourage you to do your own research, utilize free trials if they’re available, and weigh the pros and cons of each option. Having consistent cash flow is one of the key approaches to achieving success in your small business. Bookkeepers and accountants both should be aware of the amount of cash available in the business inventory every day. Whether for a small business or a large one, it is crucial to ensure that you are never short on cash.

• Having consistent cash flow is one of the key approaches to achieving success in your small business.
• By following these steps, you can keep accurate and up-to-date records for your auto repair shop in Walnut Creek, CA, and ensure the financial health of your business.
• As a key aspect of bookkeeping for auto repair shops, knowing your part margin allows business owners and managers to increase their revenue without pricing themselves out of the market.
• Your shop’s labor gross profit margin is a particular piece of data that’s tricky to align between both your shop management system and your accounting software.

QuickBooks offers both mobile and desktop apps, making it a highly versatile choice for auto shop accounting. Part margin factors in both the cost of the part as well as the price at which it sold. As a key aspect of bookkeeping for auto repair shops, knowing your part margin allows business owners and managers to increase their revenue without pricing themselves out of the market.

Analyze Your Part Margin

QuickBooks will use your receipts to help you track your expenses so that you can manage your spending. By knowing your spending patterns, you can plan ahead and make sure you’re covering your outgoings like rent and bills. What can end up happening as a result is the labor profit margin in Tekmetric will almost always be higher than the real-life number in QuickBooks. And depending on what your shop’s compensation structure is, it might be impossible to get the numbers to match 100% in both systems. By logging each and every part transaction into QuickBooks, you’ll reach 100% accuracy, but will be unnecessarily getting lost in the weeds. The reality is that most shops will be a-ok simply putting their monthly statements into QuickBooks and being in the “ballpark,” such as 95% accuracy, rather than 100% accuracy.

To kick off your research, here’s a rundown of four popular accounting software programs for independent auto repair shops. The two most widely used accounting methods are cash basis and accrual (traditional) basis methods. The cash basis method is the simplest type of accounting for your tax management. This method helps you track income as soon as you receive it, and track expenses when they payout. On the other hand, the accrual basis method helps you count income when it is earned instead of received.

The 4 Top Accounting Software For Auto Repair Shops

It’s in our DNA to have a strong appreciation for numbers and how things add up — and that goes hand in hand with our innate need to take inventory seriously. And, of course managing the complex nature of automotive charges and properly taxing for different service rates, parts, and disposal fees. We all hope that our business will operate smoothly, but the truth is bumps will happen.

Sending an invoice enables you to save time effortlessly and keep a record of your income. Arndt doesn’t have an accounting background, either, but thanks to his current solution, he doesn’t need one. Having that single-column view, he says, made adoption easy — a sentiment shared by Hall. What Arndt and Hall agree on most is the importance of monitoring business health in real-time. “It was all paper and pencil when I first started, and I used an accountant for years,” Arndt says.

Lack of a Qualified Bookkeeper or Accountant

While it isn’t designed just for auto shops, it can help you keep up on the accounting basics while saving some cash. Plus, if you’re unsure whether you want to start using Xero or not, the service provides a 30-day free trial. With Xero, you’ll benefit from automatic billing and invoicing, bank reconciliation, short-term cash flow/business snapshots, and much more.

Since the first client of Kildal Services was a repair shop – and actually still IS a client – I have a special place in my nerdy accounting heart for them. Equip yourself with nearly everything you want to know about automotive Bookkeeping for auto repair shops repair shop accounting, payroll, taxes, and more. Our monthly accounting fees include the cost to file annual taxes, and monthly accounting is made up of monthly bookkeeping, financial statements, and advice.

Minimizing Financial Discrepancies Between Platforms

Our certified QuickBooks Pro advisors will make sure you have this information in the palm of your hand when you need it and are kept up-to-date in real-time. Finding the right accountant to work with your business will ensure the financial health of your company. Allowing an accountant to handle your bookkeeping, payroll and accounting will ensure that you can be confident in their work. AGRS Accounting can guarantee that all business owners can be positive that all financial matters will be handled by a dedicated team. Knowing that your financial matters are in good hands will allow you to focus on other aspects of your business. Focusing on supplying auto repair to clients instead of concentrating on financial matters will allow for a greater turnover of the business.

• Even comprehensive information about business accounts needs to be available at the right time so managers can make balanced, thoughtful financial decisions.
• Since the first client of Kildal Services was a repair shop – and actually still IS a client – I have a special place in my nerdy accounting heart for them.
• As a result, it enhances any company’s ultimate objective of increasing profits by keeping a record of every financial transaction.
• AGRS Accounting will handle your finances as well as the bumps along the way as they occur.
• QuickBooks is a cloud-based accounting program designed to help you run your car and auto repair service more productively.
• As a small business owner, keeping track of your finances should be one of your top priorities.

It’s simple to create and customize an invoice, add your logo and personalize your “thank you” email. With best in class accounting software like FreshBooks, you can easily add tracked time and expenses to your invoices so you’ll never leave money on the table again. Today’s customers expect payment flexibility, meaning they want to pay using whatever method is most convenient for them. This means your business should be equipped to accept all major payment types–credit or debit cards, mobile wallets, checks, or cash.

Tax Services

But if you run a bigger operation and have the space, you may be able to boost your profits by taking advantage of economies of scale and ordering multiple popular items at a lower price. FreshBooks’ capacity to generate invoices and esinvotimates is maybe its most notable function. With this feature, you’ll be able to deliver individualized pricing estimates to customers on the spot. When you integrate FreshBooks into your auto business, you’ll see how easy it is to use right away — integrating it into your existing infrastructure is a breeze! In the Quickbooks application, you can take a photo and upload your receipts.

If you don’t use Mobile Tech RX, you can also create invoices in Quickbooks to track sales as you go. The only time you may want to start entering every part purchase into QuickBooks is if your shop is dealing with a stressful parts inventory or parts management issue. You should have a regular schedule and method for tracking what your business makes and what your business spends. It’s good practice to check your numbers at least once a month, and conduct a thorough reconciliation and analysis of your books at least once every business quarter.

With their expertise, bookkeepers assist in identifying cost-saving opportunities and financial trends, enabling better decision-making for the business’s growth and stability. Additionally, they may handle tax preparation, track inventory, and offer financial analysis to help the shop optimize its operations and profitability. Interestingly, the benefits of these software solutions aren’t exclusive to auto repair shops; they can be extended to vehicle dealerships as well. Like auto repair shops, car dealerships handle a variety of financial transactions daily, including vehicle sales, parts inventory management, customer financing, and more. Employing a robust accounting software can help car dealerships automate these processes, reduce errors, and save valuable time.