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:
Wait for the parts bills to come in and trust that you’re being charged the correct amount, or
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. Withouta 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.
It is often said that “a picture is worth a thousand words.” When it comes to vehicle inspections, you could even say a photo is worth a thousand happy customers. Digital vehicle inspections (DVIs), complete with photos and videos, give your customers a clear picture of their vehicle’s status and empower them to make well-informed decisions regarding repairs. This not only enhances the customer experience but also fosters a culture of trust and builds long-lasting relationships. Take a look at three ways DVIs can drive growth and success in your shop:
1. Fostering trust with photos and videos of repairs for approval.
Digital vehicle inspections provide the clearest way your associates can tell a customer what you found within their vehicle and the possible solutions. Using the media the technician captures, the vehicle owner is empowered to make a knowledgeable decision based on your technical knowledge and experience.
Sending the customer six to eight photos and videos more than 50% of the time leads to a higher ARO. Not sending enough photos and videos may not give the customer enough information on the health of their vehicle. Conversely, too many images and videos can overwhelm the customer. Capturing the full state of the vehicle with just the right number of photos and videos facilitates a culture of transparency and builds trust with customers, enhancing their experience and leading to more repeat business.
2. Proactively monitoring overall vehicle health.
“I should only get my car inspected if something seems off.” Wrong! A great way to view DVIs is to think about them in terms of overall vehicle health. A thorough DVI can not only provide insight into the customer’s original complaint; it can also give you a full picture of other issues that might be impacting the vehicle or will in the future. Just as you might need blood work and X-Rays for a correct diagnosis from your doctor, a DVI done correctly can provide insight into the health of your vehicle and help technicians make strong, educated repair recommendations.
Completing a routine “check-up” with DVIs can verify if the vehicle is in top-notch shape or proactively identify issues a customer might not see. Even if a customer does not want regular check-ups, technicians can still complete a thorough DVI when the vehicle comes in for repairs and potentially prevent further issues down the road. DVIs go beyond simply making a profit. They are a tool used to build a relationship with customers and ensure their safety on the road.
3. Educating the customer with convenient, easy-to-understand explanations.
DVIs seek to leave no questions unanswered. When vehicle owners are presented with the option for a repair, they need to know two things: information about the problem and the benefits of the repair. This is where DVIs come in as an opportunity to educate the vehicle owner and give them the information they need to make the right decision.
With Tekmetric’s MotoVisuals integration, the recommended repairs in a DVI are accompanied by educational videos and animations that give more context to the issue and how the technician’s proposed repair can benefit the vehicle owner. This provides a greater understanding of the repair process for your customers – they can even share the videos with a car-minded partner or friend for a second opinion. By educating the customer on the purpose of a repair, it gives them more confidence in your shop.
Ultimately, DVIs lead to a higher close ratio and ARO because they present the information in a transparent manner that leads to greater trust. When vehicle owners can see the why behind their repairs and understand the value of the solutions you are offering them, they’re more likely to return. As a result, you are setting your shop to experience increased customer retention, stronger relationships with your customers and ultimately, greater profitability.
HOUSTON – October 18, 2023 – Tekmetric, the leading automotive repair software company, has announced the appointment of Clare Corriveau as the company's new Vice President of Marketing. With an extensive background in the software industry, Corriveau brings a wealth of experience and strategic vision to the Tekmetric team.
“Clare's depth of experience and strategic acumen in the technology sector will be instrumental in driving our marketing efforts and advancing our position in the market,” said Sunil Patel, CEO of Tekmetric. “With her leadership, we look forward to reaching new milestones in our top-tier customer service and innovative solutions.”
Corriveau's professional journey spans 17 years across a variety of brands and products in B2B technology. Her proven track record in demand generation, marketing strategy, product positioning and brand development underscores her significant role in Tekmetric’s continued growth. In her new position, Clare will be instrumental in guiding Tekmetric’s marketing initiatives and brand development. Her responsibilities encompass enhancing brand visibility, devising and implementing marketing strategies and bolstering the company's foothold in the automotive repair software market.
Before joining Tekmetric, Corriveau was the Senior Director, Growth Marketing at cybersecurity startup Cobalt, where she led the demand generation team to drive revenue growth along every stage of the buyer and customer journeys. Prior to Cobalt, Corriveau served in several director- and manager-level roles with OneTouchPoint, Gotransverse, Blackbaud and more.
“I am thrilled to join Tekmetric, a pioneering force in automotive shop management solutions. Their commitment to revolutionizing the industry and empowering automotive professionals aligns perfectly with my own passion for innovation and customer-centricity,” said Corriveau. “I look forward to contributing to Tekmetric’s journey of empowering auto repair shop owners to increase efficiency in their operations and ultimately grow their business.”
About Tekmetric
Tekmetric, a Houston-based auto repair technology company, offers a cloud-based platform that enables auto repair shop owners to enhance productivity and increase profitability through its streamlined workflow management processes.
Designed by a former shop owner, Tekmetric’s platform drives shop efficiency through real-time data, a customizable user interface and customer-centric communication tools. Since its launch in 2016, Tekmetric has disrupted the industry with its robust fully-integrated system, developed with an emphasis on customer transparency and user collaboration. For more information, visit www.tekmetric.com.
Considered the “gold standard” in security compliance, this certification is awarded in accordance with the American Institute of Certified Public Accountants (AICPA) standards for SOC for Service Organizations, also known as SSAE 18.
As one of the first auto repair shop management systems to achieve SOC 2 compliance, Tekmetric is well-positioned to continue safeguarding sensitive information for both auto repair shops and their valued customers.
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