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

More articles

Do you ever wish you could see into the future? As a business owner, being able to predict how much business you will get during a week, a month, or a year can help you make important decisions regarding marketing your services, taking on more work, hiring more employees, or even knowing when to expand your business.

Of course, there are always going to be unforeseen situations. No matter how much technology you have, there’s no surefire way to predict accidents, natural disasters, or other changes in life circumstances. Fortune telling aside, shop owners can use real-time reports to forecast the health of their business and get a sense of how much money their garage is expected to make before the end of a week, month, or year.

Here’s how you can leverage two of Tekmetric’s real-time reports in combination to forecast your shop’s performance and test the decisions you make as a shop owner.

How Auto Repair Shops Can Plan Ahead With Real-Time Reports

August 18, 2023

Read time: 3 min

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Today’s vehicle owners look for shops that prioritize their evolving needs, and many gravitate towards shops that take care of their entire vehicle in the most efficient manner, from the engine to the tires. As vehicle owners look for a one-stop auto repair shop, shop owners have the unique opportunity to expand their business by also selling tires. This is where Tekmetric’s Tire Suite comes in — a solution that simplifies tire management, letting you save time while leveraging the opportunity to expand your service offerings.

Tire Suite is a feature that your shop can add onto your existing Tekmetric plan. With this add-on, you have access to tire-specific features that allow you to view data specific to your tires and in turn make informed decisions to support that area of your business. By maximizing the information in Tire Suite appropriately, you can open the door to this new business stream – without losing efficiency in your shop. Here are three ways you maximize tire management in your shop:  

1. Time is money – streamline processes to maintain efficiency 

Effective shop management saves you time and money – and there are several simple ways you can apply this strategy to the tire portion of your business. For instance, with Tire Suite, you can reduce the amount of time it takes to register Department of Transportation (DOT) numbers when you sell a tire. DOT registration with Tire Suite registers DOT identification numbers electronically with the appropriate tire manufacturer via the Tiremetrix integration. In addition, you get real-time feedback when entering a DOT number in the system to ensure the validity and recall status of the tire.

Instead of having to worry about compliance or losing hours of time to DOT# entry, your service advisors can gain time back with Tire Suite’s automated registration process. Typically, DOT number registration is a manual task, and the time it takes to enter each number can add up to hours of labor time depending on your shop’s sales. Tekmetric’s Tire Suite allows your service advisors to spend less time entering information and more time with the customer.  By streamlining manual processes like DOT registration, your shop can handle more work in less time and maximize profitability – all while offering a more convenient and comfortable process for vehicle owners.

2. Leverage accurate data to maximize tire shelf life

In addition to tire compliance, it is also important to set up a system where the tires are used in a timely fashion. Tire Suite allows your team to track inventory and maximize the use of available tires while also making sure tires do not sit too long on the shelf. This requires a bit of finesse, and that’s where Tire Suite comes in. Now, service writers can quickly look up all tires for preferred brands that will fit a vehicle and source them directly from inventory or add as a needed job part. 

In addition, tire fitment data allows you to access detailed tire specifications in the RO sidebar for a specific vehicle. For example, if you have a vehicle that needs staggered tires, the data will ensure you get two tires of each type rather than four of the same size. That attention to detail is made possible by leveraging tire-related data – and it can make a significant impact on growing that portion of your business.

3. Build and retain customer loyalty

Once a dealership warranty ends, 70% of customers will seek a repair shop they know they can trust and remain loyal to. Customers value convenience and comfort. When those needs are met, they are more likely to trust your shop and return to do business with you time and time again. 

Shops with the highest retention rates often make tires a part of their business because customers are looking to kill two birds with one stone. Conversely, by not selling tires, you can even hurt your retention rate. When you choose to offer tire management services and provide them in an efficient manner, you are more likely to maintain your customer retention rate because vehicle owners will have everything they need in the hands of their favorite shop.

Adding tire services to your auto repair offerings may seem daunting – but the opportunities far outweigh the challenges. When you leverage the appropriate tools for tire management, such as Tekmetric’s Tire Suite, you can maintain your shop’s efficiency and meet vehicle owners’ needs without missing a beat. The result? Happy, returning customers – and growth in your bottom line over time. 

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See how your shop stacks up against thousands of auto repair shops nationwide

You track your ARO. Maybe you watch your car count week over week. You know when a month is good and when it's below par.

But here's a question most shop owners can't answer quickly: Compared to shops like yours, are your numbers strong, average, or quietly underperforming?

There's a real difference between a number that's improving and a number that's competitive. A shop can grow ARO year over year and still be well below what high-performing shops are seeing in their market. Without an external reference point, you don't know which situation you're in.

That's the problem benchmarking solves, and it's the reason the data matters more than the direction.

Internal Tracking Tells You the Trend. Benchmarking Tells You the Truth.

Internal performance tracking is essential. If you don't know your ARO, car count, parts margin, and effective labor rate, you're managing without the most basic tools. But internal tracking has a structural limitation: it can only tell you how you're doing relative to your own history.

That's useful for spotting momentum — a rising ARO, a growing car count, tighter parts margin. What it can't tell you is whether your baseline is strong or weak relative to the market.

A shop with a $580 ARO that has grown from $520 over two years has made real progress. But if top-performing shops in their region are averaging significantly higher, that progress hasn't closed the competitive gap. It's just moved in the right direction.

The fix isn't to stop internal tracking. It's to add an external benchmark so you know what the target actually looks like.

➡ See how your ARO compares →

The Problem With Benchmarking From Anecdotes

Many shop owners get their benchmarks the informal way: conversations with peers at trade shows, numbers shared in coaching groups, or revenue figures posted in forums. These have real value, but they're also limited.

Self-reported numbers skew high (people share their wins). Peer groups are small samples. Industry averages from trade associations are often lagged and lack the granularity you need to compare fairly — a six-bay shop in a suburban market shouldn't be benchmarking against national averages that include dealership-adjacent shops in metro areas.

The more useful comparison is data drawn from shops operating in similar conditions, at similar scale, tracked in a consistent and anonymized way.

What Good Benchmarking Actually Looks Like

Effective benchmarking for an auto repair shop compares you on the four metrics that most directly drive profitability:

  • ARO: Are you getting full value from each car that comes through your door?
  • Car count: Is your volume where it needs to be to support your revenue goals?
  • Parts margin: Are you protecting margin as supplier costs fluctuate?
  • Effective labor rate: Is your real revenue per labor hour aligned with your posted rate?

Each of these metrics has a different lever. If your ARO is lagging, the fix usually involves inspection completion rates or customer communication. If your car count is stagnant, the issue is typically acquisition or retention. If your parts margin is eroding, your pricing matrix needs a look. If your effective labor rate is low, it's often a discounting or packaging problem.

Benchmarking tells you which problem to solve first. That's valuable when you have limited time and you're trying to prioritize.

How the Tekmetric Shop Index Works

The Tekmetric Shop Index is a free benchmarking tool built from data collected across more than 12,000 auto repair shops. Enter your shop's metrics and get an instant comparison showing where you stand on each of the four key measures. No Tekmetric account is required. Anyone can use it.

The output isn't a vague grade — it shows you where each metric ranks and gives you a clear picture of where the gap is largest. That's the signal that tells you where to focus first.

➡ Benchmark your shop now →

What to Do After You See Your Rankings

The benchmarking data is the starting point, not the finish line. Once you know which metric is your biggest gap, you can start asking the right questions:

  • If ARO is lagging: How consistently are your technicians completing and sending digital vehicle inspections (DVIs)? Are customers seeing and approving the recommended work?
  • If car count is flat: Are you actively pursuing new customers? Are return visit intervals optimized? Are declined jobs being followed up?
  • If parts margin is soft: When did you last review your parts pricing matrix? Is it adjusting for recent cost increases from your vendors?
  • If the effective labor rate is low: Are service writers building jobs accurately? Are discounts being applied consistently or inconsistently?

Each of these questions points toward a workflow, and Tekmetric's reporting is built to surface the answers at the job, technician, and service writer level. But even before you get to that step, knowing which question to ask is most of the work.

➡ Benchmark your shop now →

The Shops Getting This Right

High-performing shops don't treat benchmarking as a one-time exercise. They check their rankings periodically, track how their numbers shift against the industry baseline, and use the comparison to coach their teams with context.

"You're at 85% DVI completion" is a data point. "You're at 85% completion, and top shops are at 95%" is a coaching conversation with direction.

"Seeing them take the shift to Tekmetric and then grow profitability in the same four walls has been phenomenal. Some of them are just exponential."  — Matt Schwab, Clutch Automotive, Tekmetric Customer

Takeaways

  • Internal tracking shows you direction; benchmarking shows you position.
  • The four metrics — ARO, car count, parts margin, effective labor rate — are the right comparison points.
  • Good benchmarking data is consistent, anonymized, and drawn from shops with similar operating profiles.
  • The TSI tool is free, built from more than 12,000 shops, and gives you an instant read on where your gaps are largest.
  • Your benchmark result tells you which lever to pull first — and that's where the work starts.

Once you know your gaps, the next step is building a system to close them.

➡ Benchmark your shop now →

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