Repair shop management for financial control: how to do it
Many shops have a full lot and still end the month in the red. Most of the time, the problem is not job volume but a lack of control over the money coming in and going out. Responsible financial management is what lets you grow safely and pay the people who work in the business well. Here is how to organize your repair shop for financial control.
How to organize your shop for financial control
Separate business and personal finances
Using shop money for personal expenses, or vice versa, is a classic mistake. With everything mixed together, it is impossible to know whether the business makes a profit. Ideally:
- keep separate bank accounts
- set a fixed owner's draw (called pró-labore in Brazil) for the partners
- record every withdrawal and deposit.
When a business is starting out, it is common to put this off. But for the shop to grow, it needs to happen as soon as possible.
Record every transaction
Inflows, such as jobs and parts sold, and outflows, such as wages, taxes and fixed expenses, should be logged regularly. Many shops use spreadsheets, but management systems are more practical and secure.
Classify your costs
Knowing where the money goes is the first step to cutting waste. Split expenses into:
- fixed: rent, wages, internet
- variable: parts purchases, commissions, outsourced services
- occasional: equipment maintenance, renovations, investments.
That makes it easier to see where the biggest burden is and what can be negotiated or reduced.
Control inventory
Idle parts are idle money. Well-controlled inventory prevents unnecessary purchases and speeds up repairs. Keep a parts catalog with cost and selling price, record what comes in and goes out and watch items running low.
Charge correctly for your work
Pricing labor is a common challenge. Consider every cost, including parts, labor, taxes and job time, before setting a price. Charging less than it costs may seem like a way to win customers, but it creates losses. With this data in your management system, it is easier to compare jobs and decide where to adjust.
Onmotor helps with your shop's financial control
Onmotor is a management system developed in Brazil, with tools to organize your shop's finances and operations. Learn more about Onmotor or talk to our team.