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Accounts payable |
A liability to a creditor, carried on open account, usually for purchases of goods and services. |
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Accounts receivable |
A claim against a debtor, carried on open account, usually limited to debts due from the sale of goods and services. |
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Accruals |
Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. |
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Advertising |
To give information to the public about; announce publicly in a newspaper, on radio or television, etc |
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Aftermarket |
The market for replacement parts, service, accessories, and equipment for the care or enhancement of the original product, esp. an automobile, after its sale to the consumer |
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Assets |
Items of ownership convertible into cash; total resources of a person or business, as cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real estate |
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Average repair order (ARO) |
Gross sales divided by the number of invoices in a given period, expressed in dollars |
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Balance sheet |
A statement of the financial position of a business on a specified date. |
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Break even |
Having income exactly equal to expenditure, thus showing neither profit nor loss |
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Capital |
Assets remaining after deduction of liabilities; the net worth of a business. |
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Cash flow |
The sum of the after-tax profit of a business plus depreciation and other non-cash charges: used as an indication of internal funds available for purchase of tools and equipment, etc. |
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Corporations |
A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members. |
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Cost of goods |
The total price paid for products sold plus the cost of labor and overhead associated with the sale |
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Current liability |
A debt due within a year. Current liabilities include accounts payable, short-term loans from financial institutions and expenses incurred but not paid. |
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Customer service index (CSI) |
General customer survey used to evaluate company operations, may also be tied with salary bonus |
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Dealership |
A sales agency, franchise or distributor having such authorization to sell specified vehicles in a particular area |
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Demographics |
The statistical data of a population showing average age, income, education, etc. |
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Depreciation |
Decrease in value due to wear and tear, decay, decline in price, etc. |
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Direct costs |
Those costs that can be identified specifically with a particular job or that can be directly assigned to such activities |
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Distribution to owner |
Money paid to owners as a cash return on their investment in the company |
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Door rate |
Posted hourly labor rate used to compute estimates and for tracking purposes |
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Economy |
The management of the resources of a community, country, etc., particularly with a view to its productivity. |
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Effective labor rate |
The actual dollar per hour labor income after calculating productivity |
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Efficiency |
The actual time a technician takes to complete a job as compared to book time or sold time |
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Entrepreneur |
A person who organizes and manages any enterprise or a business, usually with considerable initiative and risk. |
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Equity |
The monetary value of a property or business beyond any amounts owed on it in mortgages, claims, liens, etc. |
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Expense |
The general costs of overhead and administration associated with running a business. |
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Flat rate |
The use of a published labor guide to set labor times (charged to the customer) to complete a particular job |
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Franchise |
The right or license granted by a company to an individual or group to market its products or services in a specific territory. |
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Gross profit |
Total receipts less the cost of goods or production but before the deduction of such other costs as rent or salaries. |
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Income tax |
A tax levied on incomes such as an annual government tax on personal incomes. |
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Independent repair shop |
Private auto repair and service facility with no legal ties to carmakers, franchises or other corporations |
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Indirect costs |
Indirect costs represent the expenses of doing business that are not readily identified with a particular activity, but are necessary for the general operation of the company |
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Interest |
A sum paid or charged for the use of money or for borrowing money. |
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Inventory |
The items and parts represented on a list stating a company’s stock of goods |
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Inventory turns |
The number of times that a companies inventory cycles or turns over per year. |
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Labor cost |
That part of the cost of goods and services attributable to wages, especially for direct labor. |
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Labor mix |
The ratio between labor sold and parts sold |
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Labor rate |
Posted hourly labor rate used to compute estimates and for tracking purposes |
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Liability |
Moneys owed; debts or financial obligations |
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Loans |
A sum of money lent at interest |
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Long term debt |
Loans and obligations with maturity of longer than one year; usually accompanied by interest payments. |
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Mark up |
To set the selling price of a part by adding to the seller's cost an amount to cover expenses and profit |
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Marketing |
The total of activities involved in the transfer of goods from the producer or seller to the consumer or buyer, including advertising, shipping, storing, and selling |
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Menu pricing |
A set bundled price, including parts and labor |
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Mortgage |
A conveyance of an interest in property as security for the repayment of money borrowed. |
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Net income |
The excess of revenues and gains of a business over expenses and losses during a given period of time. |
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Net worth |
The amount by which a company or individual's assets exceed their liabilities. |
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Operating income |
The amount left over after subtracting the company's operating expenses from the gross profit |
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Partnerships |
A legal contract entered into by two or more persons in which each agrees to furnish a part of the capital and labor for a business enterprise, and by which each shares a fixed proportion of profits and losses. |
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Parts matrix |
A part pricing system that allows higher margins for lower priced parts and lower margins for higher priced parts |
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Productivity |
The relationship between hours sold versus the technician's available billable hours. |
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Profit and loss Statement |
Also know as an income statement. A financial statement that indicates income and expenses and shows weather a company made or lost money for a given period. |
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Profit Margin |
Net profit margin of a business, which is calculated by deducting operating expenses and cost of goods sold and dividing the result by net sales. |
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Repair mix |
The ratio between repair work and preventive maintenance work |
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Retained earnings |
The accumulated net income retained for reinvestment in a business, rather than being paid out in dividends to stockholders. |
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Service Consultant |
A company's representative responsible for customer’s needs and coordinating workflow, up selling jobs and maintaining productivity |
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Short term debt |
Debt due to be paid off at a date less than one year in the future. |
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Sole proprietorships |
A type of business entity which legally has no separate existence from its owner. |
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Total Quality Management (TQM) |
TQM is a set of practices geared to ensure the organization consistently meets or exceeds customer requirements by placing strong focus on process measurement as means of continuous improvement. |
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Up sell |
A sales technique to sell additional items or services |
