Why Match Parts from Repair Orders on Purchase Orders?

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March 12, 2024

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Read time: 3 min

The Art of Knowing Where Everything Is

In auto repair, there are many moving parts to keep track of—both the literal parts your shop uses to repair vehicles, and the parts of your business that determine your shop’s efficiency, security, and ability to grow. If you want your shop to flourish, it’s crucial to devote part of your business to keeping track of the parts you order.

Many shops track parts in terms of cost of goods sold. The parts you need for the job are included on every repair order, so it’s easy to see what parts your customers are paying for as long as you have a solid process for building repair orders.

But what about in terms of accounts payable? How does your shop track how much you’re spending for parts from the supplier?

Should You Use Purchase Orders or “Save Time?”

For your accounts payable, or determining how much you’ll owe your parts suppliers, there are typically two routes you can take:

  1. Wait for the parts bills to come in and trust that you’re being charged the correct amount, or
  2. Create a formal purchase order each and every time you order parts from a supplier.

The advantage of going with the first route is that you save a little bit of time; there’s no second step of reconciling the part you need to purchase on a purchase order. But the cons far outweigh this advantage—because this is where shops can start to lose money.

For example, your ROs may indicate that you have a 30% profit margin on parts, but if you don’t accrue your parts bill, you won’t know for sure if that’s the case until the parts bill hits your account. Suddenly, when the money gets taken out, your margins are razor-thin.

So, what happened?

Did a supplier charge too much? Were you double-charged? Was an unauthorized person ordering parts on your account? Was there theft?

It’s hard to tell if there is no paper trail or purchase order for you to look at.

If you’re not paying attention to your parts orders on the accounts payable side, you could be losing money, and it will typically take a large missing chunk of change for you to realize that something is wrong. Without a paper trail, figuring out the problem is not only difficult but also extremely time consuming. Once you notice that there is a loss you can’t account for, all the “time saved” by skipping the purchase order step comes back in the form of time spent trying to figure out the issue.

By reconciling your parts orders on both repair orders and purchase orders, you can easily check to see what’s going on, protecting your shop from incidents where you are losing money due to overages, slip-ups, theft, and overcharges.

How to Build a Better Parts Ordering System

When it comes to tracking parts on repair orders and purchase orders, consistency is key. Shops that have strong, consistent processes and procedures—and follow them every single time—rarely have issues with leakage and theft; they instill habits in their team to keep careful track of all parts.

As long as your shop has a repeatable process for adding parts to repair orders and putting in purchase orders, you will be able to quickly identify any issues as soon as they crop up. Every service advisor and employee that orders parts and builds repair orders for customers should use the same method for filling out repair orders, creating purchase orders, and inputting this information into your shop management system and accounting system.

Create a standard process for each of the following:

  • How jobs get posted
  • How repair orders are built
  • How repair orders are approved
  • How parts orders are posted
  • How purchase orders are written and sent to suppliers
  • How purchase orders are approved
  • How parts and purchase data get analyzed

Instill Parts Ordering Best Practices with Tekmetric

Standard procedures for ordering parts and creating repair orders are built into Tekmetric. We give shops the tools and guardrails needed to effortlessly track parts throughout each step of the repair process.

From our intuitive repair order builder to our integrated parts ordering and inventory systems, we aim to align your team so that no money slips through the cracks. And our industry leading analytics and reporting tools allow you to keep track of your shop’s financial history in realtime.

This article was written with the guidance of automotive repair industry
CPA Hunt Demarest of
Paar, Melis, & Associates, P.C.

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

FAQ

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Prasanth Chilukuri understands the challenges that shop owners face each day with gaps in their efficiency and margins, which is why he co-founded Tekmetric with Sunil Patel in 2016.

Vehicle Service Pros published some of Prasanth’s tips for strategically growing an auto repair business with a shop management system like Tekmetric.

You can access his full piece here, or check out some of the highlights below.

Balance Is Key to Making Better-Informed Business Decisions

Shop owners make countless daily decisions that affect their customers, their team, and their business.

Making good business decisions is essential to keeping everyone happy and keeping the lights on in the shop, but how do you know what the right decision is?

According to Prasanth, the key to any successful business is finding the right balance between soft skills like intuition or relationship-building and hard skills like data analysis.

Both types of skills are important, but knowing when to employ each one is the trick to making better-informed decisions and growing your business.

Intuition is useful when shop owners have to make split-second decisions and often goes hand in hand with interpersonal skills. The auto repair industry isn’t just about cars, after all; it’s about people, too.

By learning how to pick up on cues and anticipate the needs of customers, employees, and vendors, shop owners can foster long-lasting relationships that grow alongside their business.

Of course, there’s only one way to know whether your shop is truly turning a profit: look at the numbers and analyze the results. Data can support any hunches you have about the health of your business, for better or for worse, so you can plan accordingly.

But if your shop is still tied to manual methods, gathering key information about parts usage and labor costs is probably not easy or convenient.

Why Manual Methods Just Can’t Keep Up

A shop management system might not be able to make business decisions for you, but it can help shop owners make sense of their key metrics and data. According to Prasanth, looking at the cold, hard facts is essential to boost the efficiency and profitability of the shop.

The science of data might seem contrary to the art of intuition at first, but they’re more related than you might think. As Prasanth describes, data can add support to a shop owner’s intuition or observations and reveal key information that can’t necessarily be gathered from conversations with customers and employees.

Unfortunately, trying to sort through the shop’s data by hand can be exhausting and often means missing family dinners to crunch the numbers after hours. And manually calculating daily, weekly, or monthly metrics can quickly become a headache with much larger room for human error.

Without real-time reporting tools, inventory counts and gross profit can’t necessarily be trusted and will always provide an out-of-date view of your business at best.

Being tied to manual processes for data collection also means being tied to the shop and losing out on valuable face-to-face time with the customers supporting the business.

As a result, shop owners are often left making the difficult decision between nurturing their intuition and building relationships, or focusing on the data and shop profitability when both are essential to the long-term success of the business. With Tekmetric, you can do both.

Get the Full Picture With Tekmetric

Tekmetric is a shop management system that comes fully equipped with business reporting tools within a repair orders software suite.

Tekmetric tracks key performance indicators like employee efficiency, parts usage, and profitability ‘round the clock so shop owners can focus on the more high-level aspects of their business.

Real-time reports are always available with numbers that are already calculated and organized.

A bird’s eye view of the shop gives shop owners the power to tailor their business plan and strategy by:

  • Adjusting parts and labor matrices to maximize margins
  • Extending or removing a running promotion
  • Deciding to add more people to the team
  • Knowing when it’s the right time to expand the business with new bays or by opening a new location
Scaling Your Auto Repair Business With Real-Time Reports

March 24, 2022

Read time: 3 min

read more

For every auto repair business, creating a clear and professional receipt isn’t just good practice—it’s essential. Whether you're working on a major vehicle repair or a routine oil change, a detailed receipt serves as a proof of payment for the customer and a legal record for your shop. It helps you maintain transparency, build trust, and protect both parties in case of disputes or warranty claims.

If you’re building your own auto repair invoice template or refining your existing process, this guide walks you through every element your auto repair receipt template should include. From contact information to labor costs, here’s what a comprehensive auto repair receipt looks like.

Auto repair shop receipt example template

We designed an auto repair shop receipt template for you to download and use in your shop. The template can be used for auto body repair shops, mobile mechanics, general repair shops, and tire shops.
Download the free template below and modify it as needed to utilize in your shop.

AUTO SHOP RECEIPT TEMPLATE DOWNLOAD

What Should Be Included in an auto repair shop receipt?

1. Shop contact information

The first thing on your receipt should be your auto repair shop’s full contact information. This builds credibility and ensures customers know how to reach you if follow-up is needed.

What to include:

  • Shop name
  • Address
  • Phone number
  • Email address
  • Website (if applicable)
  • Business logo for branding

A well-organized template with your logo and contact information at the top makes your documents look professional and trustworthy.

2. Customer Information

Next, capture the customer’s name and their contact information. This ensures the receipt is tied to the correct individual and helps with record-keeping for recurring car repair clients.

What to include:

  • Customer's name
  • Address
  • Phone number or email

This section ensures your auto repair business can easily identify who the repair services were for and reach them quickly if needed.

Tek-Tip: Wouldn’t it be great if there was an estimate building software that could do this for you? Tekmetric offers auto repair estimate software among other features.

3. Date of service and invoice number

Every mechanic receipt needs to include the date of service and a unique invoice number. This creates an accurate timeline and helps organize documents chronologically for tax reporting, audits, or warranty purposes.

What to include:

  • Date the service was completed
  • Unique invoice number
  • Optional: technician’s name or initials

4. Vehicle information

For any automotive service, tying the repair order to a specific vehicle is a must. This helps with real-time service tracking, vehicle history reporting, and future maintenance recommendations.

What to include:

  • Year, make, and model
  • Vehicle Identification Number (VIN)
  • License plate number
  • Mileage at the time of service

5. Description of services performed

This is the heart of the receipt. Clearly outline what repair work was done and what repair services were provided. The more detail, the better.

What to include:

  • Itemized list of services
  • Description of each job (e.g., “Brake pad replacement” or “Engine diagnostic”)
  • Associated labor costs for each service
  • Cost of parts

6. Parts and material breakdown

An itemized list of parts and materials used in the repair work is just as important as the labor section. This transparency helps avoid disputes and gives your customer clarity on what they’re paying for. Most auto repair shops don’t show the markup percentages on parts but you can if you want to maximize transparency.

What to include:

  • Part name and number
  • Quantity used
  • Cost per unit

7. Balance Due and Payment Summary

Now it’s time to outline the financials, from the subtotal to the total amount. This section should also include the total cost, taxes, discounts, and any payment options you accept.

What to include:

  • Subtotal (before tax)
  • Taxes (state/local)
  • Any discounts or promo codes
  • Total amount due
  • Payment methods accepted (e.g., cash, credit card, financing)
  • Amount paid and remaining balance
  • Due date for final payment, if applicable

Including this section with clear headings avoids confusion and can prevent billing issues down the line. It also ensures the receipt can function as proof of payment. Lastly, this is a great place to feature your financing options (if applicable).

8. Warranty Information

Warranty details protect both your shop and your customer in case a part fails or a job needs to be redone. If your auto repair shop offers any warranty, you need to clearly list what’s covered and for how long.

What to include:

  • Warranty length (e.g., 12 months or 12,000 miles)
  • What is and isn’t covered
  • Instructions for claiming the warranty
  • Any third-party coverage (for example, if a part manufacturer offers a separate warranty)

This section should be written in clear, non-technical language to help customers fully understand their protections. You may want to include a signature line for the customer to acknowledge receipt of the warranty.

9. Streamline receipts

Creating receipts and invoices by hand can be tedious but Tekmetric streamlines that for you. Tekmetric can help you build faster estimates and take payments digitally with our auto repair estimate software.

Some of our features include:

  • Streamlined estimate building
  • Digital approvals
  • Job history and reporting in one place
  • Financing options for customers

Final Thoughts

A well-documented auto repair receipt protects your shop, helps your customer feel confident, and sets the tone for a long-term relationship. From capturing accurate customer information to detailing every repair service, your mechanic receipt should leave nothing to guesswork.

Don’t just think of it as paperwork—think of it as part of your shop’s customer experience. With a little extra attention to your receipt process, your auto repair shop can stand out as a professional, transparent, and customer-first automotive service provider.

Inventory can include items like oil, tools, and large equipment. It also includes stock items, or parts which are sold to the customer during the course of repairs, such as gaskets and timing belts.

Inventory management and parts management go hand in hand, but outside of labor profits, the profit a shop brings in ultimately comes from parts markup at the point of sale. Consequently, there’s very little room for error in managing parts.

Simply put, mismanaged parts means money left on the table and unhappy customers—a combination no shop owner or automotive team wants to experience.

A good auto parts inventory management system should let you:

• Know what parts you have in stock and how many you have

• Track what sells and what sits on the shelf longer than it should

• Help you plan for growth.

With the right auto parts inventory management system, your shop can go from disorganized to a well-oiled machine generating more and more profit.