Tekmetric’s Guide to Effective Customer Communication

Your automotive shop's service advisor plays an important role in the overall operation and even growth of your business. The service advisor explains maintenance and service needs to customers, and answers their questions in detail. The success of your business relies on having the right people in these roles and supporting them with necessary skills training. 

To find the best candidates, look for people with potential or training in these areas: 

Legal Disclaimer: This article is written for informational purposes only and does not constitute professional financial advice. Please reference section179.org and a professional accountant for advice on financial planning and filing taxes.  

As 2020 comes to an end, you might be thinking about all of this year's expenses and wondering what you might be able to write off on your taxes. You may even be considering whether or not to make a big purchase, weighing the tax deductions you could get if you bought it this year versus next.

Is it worth buying that new lift before the year ends? Or should you put it off until 2021?

What is Section 179?

Section 179 of the IRS tax code allows business owners to write off the entire cost of a piece of equipment, renovations, or other assets in the first year instead of writing off an asset a little bit at a time over a five, seven, fifteen, or thirty-nine year period. To give an example, if a shop owner buys a new tire machine, they could either write off the taxes over a seven-year period, or they can use Section 179 to get the entire deduction in the first year.

What Type of Costs Qualify for Section 179?

• Tangible business property, including machinery and equipment
• Leasehold improvements
• Computer software*

*Is Tekmetric Eligible for Section 179?

Generally speaking, off-the-shelf computer software that has been purchased outright is eligible for Section 179. Because Tekmetric is a web-based software and does not make users sign a contract, it is not eligible for section 179, but it does qualify for a standard tax deduction.

Every auto repair shop spends money before it gets paid. Parts come in and the invoice follows. Technicians log hours and expect a check Friday. Meanwhile, the customer who approved an $1,800 repair might not pick up the car, or pay for it, until next week. The shop carries all of those costs in the gap. Working capital is what covers it.

Put simply, working capital is the cash you have on hand after subtracting what you owe in the short term. If you have $40,000 in the bank and $30,000 in bills due this month, you are running the shop on $10,000. That number decides whether a slow week is an inconvenience or a crisis.

Most shops do not run short because business is bad. They run short because of timing. Payroll, parts invoices, rent, and tax payments have a way of landing in the same week. This article covers why shops need working capital, the financing options owners search for most, and the operational changes that shrink the gap before a loan is ever needed.

Common reasons auto repair shops need working capital

1. Parts are paid for before the job is

A repair order starts costing you money the moment a part is ordered. Whether you pay the supplier on delivery or on 30-day terms, the bill comes due on the supplier's schedule, not the customer's.

Before borrowing to cover it, look at how long parts sit between arrival and invoice. Faster returns and tighter ordering free up cash you already have. If you don’t already have a way to track your inventory, Tekmetric’s inventory features can help you.

2. Payroll does not wait for approvals

Payroll is a constant while customer payments come in waves. Technicians and service advisers get paid every week or two whether or not the jobs they worked on have been approved, completed, and collected. This can create a gap where you need to pay your employees, but the customer hasn’t paid yet.

Tekmetric can help you bridge this gap with capital financing.

3. Customers delay or decline big-ticket repairs

By the time a customer hears a $2,400 estimate, your shop has already invested a diagnostic hour, a lift, and often a parts order. If the answer is "let me think about it," that work is unpaid and the bay is tied up. If the answer is no, you absorb the cost and the car leaves with the problem still in it.

The issue is rarely that customers do not trust the recommendation. It is that they cannot pay for it all at once. Shops that offer pay-over-time options at the estimate stage, rather than at checkout, give customers more reasons to say yes to the repair.

4. Equipment breaks, or the market moves past it

A lift, an alignment rack, or a scan tool rarely fails on a convenient day. And even when nothing breaks, the vehicles coming through the door change. ADAS calibration, EV service, and newer diagnostic platforms all require equipment that costs five figures and does not generate revenue until it is installed and your team is trained on it.

This is why auto repair equipment financing is one of the most-searched funding terms in the industry. Equipment is the clearest case where borrowing can make sense: the asset produces revenue over years, and spreading the cost over that same period keeps your working capital available for parts and payroll.

5. Seasonal swings and slow weeks

Car count moves. Weather, holidays, local layoffs, and tax refund season all change how many vehicles roll in. Your fixed costs do not move with them. Rent, insurance, software, utilities, and salaried staff cost the same in a 60-car week as in a 90-car week.

A shop with healthy cash flow treats a slow stretch as a chance to train, clean up the parts shelf, and run a marketing campaign. A shop without it treats a slow stretch as an emergency.

6. Growth costs money before it earns money

Hiring a technician means a signing bonus, tools, training, and several weeks of lower productivity before that bay is profitable. Adding a location means a lease deposit, build-out, and a second set of everything. Even a successful marketing push brings in customers whose first visits often start with inspections and lower-ticket work.

Growth is the best reason to need working capital. It is also the easiest one to underestimate.

How to improve your cash flow

The best financing is the kind you never have to apply for. Most of the reasons above are timing problems, and timing problems are operational. Here is where the all-in-one auto repair platform earns its keep.

Get paid the same day the work is done 

Text-to-Pay lets customers pay from their phone before they arrive, so the invoice is settled when the keys change hands, not after a conversation at the counter. Tekmetric Payments offers next-day funding, with Instant Payouts available for shops that need faster access. 

Increase approval rates on the jobs that strain cash

A digital vehicle inspection with photos and video shows the customer what the technician sees. Digital authorization lets them approve from anywhere. Buy Now, Pay Later through Affirm, Klarna, and Sunbit, offered directly on the estimate, turns "not today" into a "yes." 

Keep parts moving

Integrated parts ordering ties every part to a repair order, so nothing gets ordered twice and nothing sits unbilled. Inventory tracking shows what is on hand, in use, and waiting on a return, which is the fastest way to find cash hiding on a shelf.

Price every job to protect margin

A parts and labor matrix applies consistent markups automatically, so a rushed service adviser never undercharges on a Friday afternoon. Small margin leaks add up to real working capital over a quarter.

See the numbers before they become a problem

Real-time reports on ARO, car count, close ratio, and declined jobs show where cash is leaking while there is still time to act. The end-of-day report closes the books without a spreadsheet.

When you do borrow, do it from inside the platform

Capital Financing through Tekmetric Payments, offered in partnership with Stripe Capital, lets qualifying shops see offers, apply, and manage repayment from the Capital tab in Tekmetric. Repayment comes out automatically as a percentage of daily transactions, so it flexes with your volume, and there is no penalty for paying it off early.

The bottom line

Auto repair industry funding needs are real, but most of them trace back to timing: cash goes out for parts, people, and equipment before it comes back from approved, collected jobs. Fix the timing and you need less capital. Give customers a way to say yes, get paid the same day, keep parts moving, and watch the numbers daily. When you do decide to finance growth, do it through the same platform you run your shop on.