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Parts management is a critical function of any auto repair shop business. The only way to guarantee that you’re making a profit on the parts you sell on repair orders is by having an air-tight system for managing and tracking those parts from purchase to sale to reconciliation. The final step of making sure that each and every parts transaction is accounted for is probably the most important step—and the most misunderstood.

Some of the issues your auto repair shop will run into if you don’t carefully manage parts include:

• Un-billed parts (forgetting to collect payment on parts)
• Inconsistencies between your cost of goods sold and accounts payable
• Inability to track and receive return credits
• Inability to detect theft before it gets out of hand
  

Many of these issues can be avoided by using purchase orders to reconcile the parts you sell on repair orders.

But many auto repair shop business owners still wonder what some of the best practices are when it comes to parts management. How often should you be reconciling parts payments? Who should take on this task: you, your service advisors, or a dedicated parts manager? How do you make sure you’re getting the best value for the parts you buy and sell? How do you ensure that each and every part is being billed?

Let’s answer some of these questions, and unpack the best practices for parts management.

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.

When customers walk into your auto repair shop, they’re trusting you and your team with the health of their vehicle, one of their most expensive assets.

They’re coming in with a problem or set of problems and expect your team to effectively fix those problems in a reasonable time frame.

And modern expectations for customer service have shifted as our technology has evolved. Customers don't want to have to find time for a phone call when they can just get texted updates about their repairs, and digital tools make it easier for shops to build transparency in their process.

Modern auto repair shop software not only makes it easy but lays the foundation for a modern customer experience at every step.

Offering a Modern Auto Repair Shop Customer Experience Starts with a Modern Shop Management System

We're big advocates of modernizing your auto repair shop, and we don't necessarily mean replacing all your racks, updating all your compressors, and swapping out your alignment rack. Sure those might help, but we get those can be really big investments.

That's why we're focused on the behind-the-scenes operations of your shop, the overall management and flow of repair orders. Modern shop management software enables owners, managers, service advisors, and technicians to gain visibility into, and control over, their individual part of the process with specific functions:

• Cloud-based shop management
• Real-time control
• Digital Vehicle Inspections
• Built-In Payment Processing
• Digital Shop Communications
• Efficient Parts and Inventory Management

While all of these directly work to modernize your shop operations, they also work to modernize your shop experience for customers.

When your shop is using Digital Vehicle Inspections instead of paper printouts, you're not only making it easier for your technicians and service advisors to communicate and collaborate, but you're also modernizing how your shop interacts with customers, by emailing or texting results and approval requests.

Running any business is an art and a science. There are tons of daily and long-term decisions you have to make to continue growing your business.  

As a shop owner, you have to make sure your employees and customers are happy, that repairs are efficiently getting through the door, and that your shop is profitable.

The Art of Running Your Business

Intuition and emotional intelligence are what make up the art of running your shop.

Your intuition will steer the split-second decisions you make when it comes to things like helping technicians work through a challenge, answering customer questions, exploring business opportunities, and networking with partners. Intuition can be a good thing—after all, it’s the culmination of the experiences you’ve had before. For example, the bad gut feeling you get about a potential business partner can save you from a world of frustration.

Your emotional intelligence is also a crucial part of running your business. As a leader, you have to be there for your team, which means knowing when someone is having an emotionally off day so you can help them work through the situation. Your emotional intelligence is a guiding compass for your team's emotional responses to each other and to customers.

Some days, you or your service advisors will run into customer challenges. Your service advisors will follow your lead, so if you use your emotional intelligence and show empathy and understanding when a customer is having a bad day, that positive example will rub off on your entire team. Your service advisors will show patience and grace in similar situations.

However, while intuition and emotional intelligence are valuable, you can’t rely on them alone. You also need to test your business decisions—your business “hypotheses,” if you will—with data so you can know whether or not you’re on the right path.

Navigating the estimate and repair process starts with an automotive repair order form. And a manual process may create more work for your team. Your service advisors are trying to move everything along quickly and accurately, but they're human and mistakes do happen.

With a manual automotive repair order form process, it can be easy for service advisors to get lost in the hustle due to typos, illegible handwriting, or estimates saved in the wrong place.

You might also find that it’s difficult to guide your business with a manual estimate and repair order process because data collection can become an enormous challenge.

Using traditional automotive repair order forms is kind of like trying to navigate a road trip with a paper map: it can be easy to get lost in the process, and once you’re lost, it can be difficult to get back on track. Nowadays, paper maps are just one of our endless choices for navigation tools, and how many drivers still use them?

If so, we support you.

Every mile you drive toward running your shop like a well-oiled machine is a mile in the right direction.

Choosing and optimizing the right technology to run your shop can lead to growth that accelerates into massive returns on your investment.

The Auto Repair Industry is experiencing a number of changes. From larger economic shifts to a growing technician shortage, its now more crucial than ever to set your shop up for growth.

Often in moments of chaos there are windows of opportunity.

After every economic decline, no matter how steep—the housing crisis, the dot-com bust, even the Great Depression—the world has managed to come back.

Times of economic downturn are difficult, but there is light at the end of the tunnel. As far as the virus is concerned, economists are even speaking of a “V” curve. Meaning just as fast as our economy slowed down, it may pick up that quickly too.

In other words, have hope. There are opportunities during slow periods to adjust how you operate and how you service your guests.

These opportunities can help you navigate a tricky economy and prepare your shop for when business picks up again. This may be an unprecedented time in human history, but it’s also an open window for innovation.

‍What you do now will have a big impact on the future of your business.

If less cars than usual are rolling into your shop for repairs, you now have some time to work on streamlining your process, being more efficient, eliminating waste (of both time and materials), and improving your marketing and guest experience.

How should shop owners approach this situation? In a way, the same way you might approach business at any other time: finding ways to innovate and improve.

It might sound simple, but it's true: smartphones and digital experiences have revolutionized the way people interact with businesses. We've all come to expect near-instant responses, simplified checkout processes, and visibility into what we're paying for.  

And independent auto repair shops aren't any different. There's a unique opportunity where your business can meet customer's expectations with modern service and modern operations.

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How Can You Make Your Auto Repair Shop More Modern? 

We keep saying that word "modern," but what does that really mean for auto repair shops? When we step back and think about the modern independent repair shop, we could sum it up with three core concepts:

1. The freedom to run your business in a more contemporary way with data, industry knowledge, flexibility and independence to work as in whatever way is best for you and your shop.
2. The power to simplify your shop's operations can gain complete visibility, control and opportunity to determine the best path forward for every decision.
3. The best experience for your customers, every time, for every job, whether that's a coolant flush and pad replacement, or a turbo rebuild.

With the right tools in place, your team members won’t have to stress about extra oversight and can feel empowered to take the reins at work. And your customers can have a more active say in the repair process.

One of the best tools for modernizing your business is a modern, cloud-based shop management system.

Abruptly shifting from task-to-task a handful of times throughout the day can disrupt your workflow and distract you from spending time with customers. And let’s face it: we’re all prone to tunnel vision when we’re focused on mundane tasks that can probably be automated for us.

For the shop owners and service advisors who have been in the game for a while now, it’s likely you already have your shop’s tedious functions down, but you may still have a major opportunity to save time. And for those of you who are new to the game—whether you just started your shop or are in the process of getting things up and running—you might have clicked on this blog to find your solution to your shop’s auto repair receipts. There are many auto repair receipt options out there. You could get a template or use a basic PDF. But the modern customer experience can be met with a shop management system that has a receipt process built into it.

Changing even a small procedure in your shop can have a big impact. Streamlining your auto repair receipts, for example, can save your shop time, enhance your shop’s customer experience, and even boost transparency within your shop. Let’s say your shop takes about five minutes to fill out one receipt manually. So if you have about 25 repairs in a day, that five minutes adds up to around two hours a day—simply filling out receipts. You shouldn’t have to spend time rewriting the same information over and over. The same information that you’ve already plugged in during the estimate process should automatically go into the receipt for you.

But when it comes to receipts, you can’t just cut corners to save on time. You need to make sure you include all requirements on an auto repair receipt—at minimum. Let’s take a look.

Hello Shop Owners, Sunil Patel, Co-Founder of Tekmetric here.

I’m writing this blog because I believe it’s both an honor and a duty to be a leader in business.

Recently, I was awarded by Houston Business Journal as a Most Admired CEO of 2020, and this got me thinking about the leadership principles that have helped me along the way and made Tekmetric what it is today.

Not only do I lead a team of great talent, but I also speak with and have the pleasure of doing business with many strong leaders, whether it be shop owners, other entrepreneurs, or even other leaders within the company.

The fact of the matter is that I wouldn’t have been able to build a robust shop management software without my team. Watching them succeed and set each other up for success is hands down the most rewarding part of my job.

It’s a privilege to work with talented and innovative individuals that make me proud each and every day.

Playing a part in helping them grow and flourish makes me feel like I have served a purpose larger than simply building a product or making money.

Inspired by the HBJ honor, I took the time to sit down and outline a few of the leadership principles that I have always relied on.

They focus on listening, learning, and recognizing everyone as an individual. I hope they help you and your team grow as people and as a unit.

1. Listen to Your Team

Good leadership relies on a strong feedback process.

Listen to your team, whether it’s an idea or how they’re feeling so that they know you care not only about their contributions but also about them as people.

Once a week, I sit down with the leaders of different departments and simply listen to how things are going. What are the current challenges they’re facing? What are some successes they’re proud of?

What do they feel they could use more support with? Giving them the room to voice their concerns, their desires, and their victories provide them with a model for being the best leader they can for the people they lead.

Even when we’re hiring new team members, we like to get input from our current team to make sure we’re considering all voices in the process.

No idea is a bad idea. Even the ideas that you never end up using still have value because they can spark other ideas, show your team a new perspective, or simply show the person who voiced them that they were included as part of the team or project.

The truth is that estimates tie into professionalism. When the first oral surgeon gave you an estimate for your wisdom tooth removal surgery, they helped you:

• Manage your expectations: You knew what kind of procedure to expect, and how much you could expect to pay for it.
• See that the office cared about your wellbeing: The oral surgeon and their staff wanted you to make the best choice possible and gave you a resource to accomplish that.
• Have a reference point for the future if any issues come up: For example, if you got charged a couple of hundred dollars more after your procedure, you’d have documentation to show that the extra cost wasn’t part of the plan.
  

Wisdom tooth removal surgery isn’t cheap. Neither is auto repair work.

Just like a professional oral surgeon’s office explains to patients what their options are and how much they should expect to pay for procedures, a professional auto repair shop shows drivers what their repair work options are and how much they should expect to pay for repairs.

That professionalism is what helps you win over and retain more customers. If your customers are deciding between different auto repair shops, they’ll likely stick with the business that shows the most professionalism.