Need some advice

[defiancetire]

Hey everyone, I am one year into my business, Yet have no idea how much money im making! Im good at the working on cars, and doing jobs correctly but when it comes down to keeping track of every penny, Im a big slacker. Well This year is time for some change, I wanna know!

 

How do you guys keep track of everything? I used snap on manager se, But the numbers never match my bank accounts etc..And theres no way to keep track of expenses such as utilities, etc..Also how do you keep track of consumables like brake cleaners, wheel weights etc?

 

Im at a total loss.

[bstewart]

Admitting you have a problem is the first step to finding a solution, great job!

 

A good place to start would be buying Mitch Schneider's Automotive Service Management book series, they run about $25 each there's 8 of them.

They are fantastic for getting your shop's numbers under control!

"Managing Dollars With Sense" would by far be the best one for your particular situation, but I'd highly recommend the entire series.

That one book answers the exact questions you're asking.

[defiancetire]

Admitting you have a problem is the first step to finding a solution, great job!

 

A good place to start would be buying Mitch Schneider's Automotive Service Management book series, they run about $25 each there's 8 of them.

They are fantastic for getting your shop's numbers under control!

"Managing Dollars With Sense" would by far be the best one for your particular situation, but I'd highly recommend the entire series.

That one book answers the exact questions you're asking.

Hopefully I can find this series used on amazon, thanks!

[xrac]

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[Jeff]

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[Jeff]

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[defiancetire]

Are you using Quickbooks? If not I recommend it. It will integrate with your Shop Key. Have an acct help you set it up and put EVERYTHING in the system. That is one of the best things I ever did. My ex was a numbers cruncher for a large company. When I started QB she set up all the accounts that didn't set up when Mitchell/Shop Key did their initial inistall. AfteR that it's just putting everything in the system IN THE CORRECT ACCOUNT .

I am not using quickbooks, I do have the install disc purchased and had it installed at one point, was very confusing

[mspecperformance]

I think your best bet if you are not particularly good with numbers or very organized yourself is to seek help. Look for a good accountant that is familiar with qb. You need to have them set up your chart of accounts and show you how to do the data entry. This may cost you some money up front (even a couple thousand dollars) but if you are paying them good money make sure they are setting things up and training you how to work the program in its entirety. I would also highly suggest you find a good mentor or coach. There are plenty of great consulting companies out there. I personally recommend Elite. I use them and they have been instrumental in my transformation. If you want more details about them you can PM me. A good coach will give you the best advice from their own mistakes and what works for the top shops. They will also guide you learning how to calculate and understand your Key Performance Indicators. These are vitally importantly for you to understand like the back of your hand and you track on a daily basis.

 

I strongly suggest you seek the proper guidance even if you have to pay for it. I didn't for years and it cost me time. If I would have known what I known now in my first years I would be a millionaire sitting on a beach in fiji drinking fruity drinks. You are in the early stages, kick ass now!

[defiancetire]

I think your best bet if you are not particularly good with numbers or very organized yourself is to seek help. Look for a good accountant that is familiar with qb. You need to have them set up your chart of accounts and show you how to do the data entry. This may cost you some money up front (even a couple thousand dollars) but if you are paying them good money make sure they are setting things up and training you how to work the program in its entirety. I would also highly suggest you find a good mentor or coach. There are plenty of great consulting companies out there. I personally recommend Elite. I use them and they have been instrumental in my transformation. If you want more details about them you can PM me. A good coach will give you the best advice from their own mistakes and what works for the top shops. They will also guide you learning how to calculate and understand your Key Performance Indicators. These are vitally importantly for you to understand like the back of your hand and you track on a daily basis.

 

I strongly suggest you seek the proper guidance even if you have to pay for it. I didn't for years and it cost me time. If I would have known what I known now in my first years I would be a millionaire sitting on a beach in fiji drinking fruity drinks. You are in the early stages, kick ass now!

Sitting on a beach sounds excellent.

[kars]

^{My 2 cents.}

^{Get an accountant. Get one that has at least 2 other shops. I have gone through 3 accountants in the past year. They just don't get what I need. None of them has ever done accounting for auto repair. Ask around to some other shops and see if they can recommend someone.}

[defiancetire]

Ok, Dumb question of the day. Could I train my wife to track everything I do, Just like an accountant would.

Edited April 29, 2016 by defiancetire

[xrac]

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[defiancetire]

Do you know what to teach her? How is she at computers, learning, and business ideas?

Main focus of the year, Is efficeincy between me and hours worked.

But id also like to know where all my spending goes, what for,etc.

 

Itd kinda be nice just to have her there everyday, im sure I can save money in places, but me finding time for that, is next to impossible.

 

I have an 80 hour work week as is, paperwork is usally at the bottom of the pile.

[Jeff]

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[carolinahigear]

Find a book keeper who works with small businesses and turn it over to them. You can make $200 to $300 per hour (with parts profit) on lots of jobs. Pay a service provider for accounting so you don't have to spend your VERY VALUABLE time doing it.

 

Thank me later!!

 

Hi-Gear

[alfredauto]

I use Mitchell manager which is the same as snap on I'm pretty sure. The trick is to figure the average cost of things like wheel weights brake clean antiserize and put them into the canned jobs.

 

(Extremely basic/inaccurate math here) So a tire mount/balance for $20 has a profit of $17 In the program. $3 for valve stem, weights, bead sealer. An oil change for $40 nets you $20. Like I said just average the cost of oil filters for the last 100 cars and come up with a number. Or another way is not offer a standard one price service and put the costs in for each job.

 

Once you know the profit on your jobs subtract the labor costs and utilities on an excel spreadsheet at the end of the month.

 

If your bank account is short there's a couple reasons. You might not be putting all the parts/materials used into the system. Someone might be stealing. You might not figure credit card fees, surcharges, billing mistakes, or petty cash for lunch or gas or whatever.

 

Don't get me wrong, learning to account for every dollar is a massive pita at first. It sucks and not many people want to do it. That's why accountants exist. But you can do it yourself. Is it worth the $500 a month savings to do it yourself? I can't answer that one. I enjoy doing my own books. I also change my own oil. And I have guys on payroll that can do that with precision.

[Shopcat]

carolinahighgear is right, spend your time on what you do best, making money fixing cars! Find someone who knows what numbers to watch also. You know, the important key performance indicators that let you know your shop is heading in the right direction. working hard is almost useless if you are not working smart at the same time.

[lydiakate223]

Hey guys,

 

I've been a full-time bookkeeper for several years, but I'm wanting to work specifically with mechanics. I know you all have unique problems, that only you guys deal with - and I'd love to hear about your pain points, and what areas you would like help in - even what you want out of it, in the end. Is it communication? More free time? Knowledge?

 

I'm working on a website right now (linked below), but if any of you would like to get in contact, I'd be happy to answer questions or help in any way I can.

 

http://www.constructivebookkeeping.com

[AndersonAuto]

I know this topic is old, but since it got pushed to the top, I'll chime in.

 

There are a couple of people here who want you to hand it all over to an accountant or outside bookkeeper and "let them do what they're good at" and "quit wasting your valuable time" on such tasks. I couldn't disagree more. Do you want to own a business or do you want to own your job? There's a big difference, and an intimate knowledge of your business financials is the first step in moving from owning a job to owning a business.

Step 1. Take accounting 101 at the local community college. You absolutely must know basic double entry accounting. Without this knowledge, how on earth do you even know if the person doing your books is doing a good job?

Step 2. Buy Quickbooks and get the chart of accounts properly set up. Your financial system is there to help you MANAGE THE BUSINESS. It's NOT to simply to keep track of how much tax you need to pay. The chart of accounts is the heart of your financial system, and it MUST be set up properly. The problem is that most people rely on an accountant or bookkeeper to set up the chart of accounts instead of someone who knows how an auto repair shop needs to run. The accountant will set up your chart of accounts to make it easy for THEM to do your taxes, they will NOT set it up so you can manage your business because they don't know how to manage your business.

Step 3. Do your own books. You can literally do this in 15 minutes a day if you set up your systems correctly. It will be slow and difficult at first, but from that point on you'll be in tune with how your business is operating. You'll be able to spot a problem when it happens, not 6 weeks (if at all) from when it happened.

Most people I know who use an accountant for their books end up tossing the envelope with the P&L in a drawer unopened because they have no idea what it means. They only know how little they made during the year because the accountant announces "Good News, you don't owe any taxes". I don't like paying taxes any more than the next guy, but I'd rather pay taxes on 300K than get a refund on 30K.

[FROGFINDER]

I started with envelopes and a file folder. If you watch your pennies the dollars will take care of themselves. Then i married my accountant with great benefits;)

[alfredauto]

I completely agree with Anderson Auto. I use a combination of Mitchell Manager and my bank & credit card statements to fill in my excel spreadsheet. I don't use quick books but I'm not opposed to it. I just like my system better. I'm somewhat of a control freak so I need to keep track of all the numbers. I can tell you what it costs per minute once I open the front door.

 

It all boils down to what you input. Every part we buy goes on a repair order. I have ro's for the shop truck and my personal vehicles. Every part goes into inventory or on a RO. Simple.

 

Some business owners don't mind handing it all over to the accountant, that's really not a bad thing if your not good at it. You don't need to be an accountant to run a successful business. Plus if you're the type of owner to just pocket as much cash as you can you are better off with an accountant handling your books.

[dfleming88]

On 1/17/2017 at 11:31 AM, AndersonAuto said:

Step 2. Buy Quickbooks and get the chart of accounts properly set up. Your financial system is there to help you MANAGE THE BUSINESS. It's NOT to simply to keep track of how much tax you need to pay. The chart of accounts is the heart of your financial system, and it MUST be set up properly. The problem is that most people rely on an accountant or bookkeeper to set up the chart of accounts instead of someone who knows how an auto repair shop needs to run. The accountant will set up your chart of accounts to make it easy for THEM to do your taxes, they will NOT set it up so you can manage your business because they don't know how to manage your business.

 

I just started doing this over the weekend... what does your chart of accounts look like?

[AndersonAuto]

40 minutes ago, dfleming88 said:

I just started doing this over the weekend... what does your chart of accounts look like?

One of the bigger differences between an auto shop and many other businesses is how labor is accounted for. Technicians go under Labor COGS vs expenses. An accountant will want to make labor and expense line because they don't know how an auto shop works. When you calculate what you're charging the customer based on billable hours, you want to be able to track your labor as part of the cost of goods, that's what makes labor a COGS item. Anything that you have a sales line for, like sublet or towing, need to have a corresponding COGS account. Other than that, you just want to create broad categories (AKA accounts) for your expenses, then create subcategories within those main categories. For example, you might have an "insurance" account, and "liability" as a sub-account and "work comp" as another sub-account. This is not to say that all insurance belongs under the insurance account. Health insurance for instance would go under "employee benefits". These are the sort of things that you have to consider as you're building your chart of accounts.

I have a rule with my bookkeeper. We don't create any new sub-accounts without discussing it first, and creating a new main account is to be avoided if at all possible. The goal is to have a very simple and easy to read P&L.


 

[dblanco1215]

Hello everyone, I find this post very informative. I wonder if someone can provide help as I'm having a very difficult time managing my auto body business. Been in business for only a couple of months in NJ. I know I have a long road ahead of me and I'm up for the challenge. However, having a hard time figuring out how the whole "Back Office Operations" should run. Does anyone know of any training course in how and what the rules are regarding all the paperwork required to protect my business, billing, claims, etc? Because we're new we can't afford much, my spouse and I have put a lot of our savings into this business, so we're watching every penny. We still haven't acquired estimating software, looking to find the most affordable option out there.

What I really wish is to find a reliable resource when questions arise. Feeling a bit discouraged.

Hello everyone, I find this post very informative. I wonder if someone can provide help as I'm having a very difficult time managing my auto body business. Been in business for only a couple of months in NJ. I know I have a long road ahead of me and I'm up for the challenge. However, having a hard time figuring out how the whole "Back Office Operations" should run. Does anyone know of any training course in how and what the rules are regarding all the paperwork required to protect my business, billing, claims, etc? Because we're new we can't afford much, my spouse and I have put a lot of our savings into this business, so we're watching every penny. We still haven't acquired estimating software, looking to find the most affordable option out there.

What I really wish is to find a reliable resource when questions arise. Feeling a bit discouraged.