Worried about managing your cash flow in your auto repair business? An automotive repair shop that doesn’t have good cash flow will eventually shut down. To eschew any dilemma, you should plan your shop algorithm accordingly. It is impossible to predict uncertainty in the auto repair business since even your loyal customers may stop bringing their vehicles to you when the economy slows. So having a smooth track and a backup plan is important. Use auto repair software to track down your shop expenses.
Good accounting software helps you track down all the cash going in/out of your shop. You can easily see paid/unpaid invoices and focus on reducing expenses.
Let’s jump below and learn more about how maintaining a good cash flow lets you thrive in your business.
What Exactly is Having a Good Cash Flow?
First of all, we need to understand what exactly a cash flow is. I will try to keep it simple so that you can easily understand.
When I say to track down your cash flow using the auto repair software. It means tracking down your business’s net amount of cash going in and out of your auto repair shop.
An increased cash flow means your business is accumulating cash reserves. On the other hand, a negative cash flow indicates that you are depleting cash reserves. A cash reserve is your company’s liquid assets kept on hand to meet short-term and emergency financing needs.
Try to avoid your bank account going red because nobody wants to become bankrupt. It’s important to keep money in your account in the auto repair business because you’re not going to have business all 12 months.
There will be days when you will have no new customers entering your shop. On hard days, you will have rents to pay, employees to pay and let’s not forget you have to market your business and run paid ads to make new customers.
Let’s dig down ways that will help to improve your auto repair shop cash flow:
Keep An Eye On Your Expenses
Keeping an eye on your expenses is important because it lets you know where you need to cut your expenses and where you need to invest.
For instance, in my grocery store, I had to manage everything manually. Manual things do take time and drain the energy! No breath of sighs!
Moreover, my cash flow was going negative which was quite intimidating for me, trust me there were sleepless nights.😣
For tracking my expenses I had to sit down on weekends and go through long ledgers and my diaries where I used to write down all expenses. It was chaotic and I had to drink 3 cups of strong coffee to focus.
Duh, to cut the story short I concluded in the end that these paper methods were costing me way too much. So I planned to get my hands on one good software that automated my workflow. And obviously, it helps me with tracking down expenses. My choice was a good auto repair invoicing software.
So if you are still on old methods, invest wisely and give yourself freedom from huge paper stacks. It’s hard to keep all data in one place but with auto repair software you can easily track and save everything in one place.
Don’t Lower your Prices To Increase Car Count
First of all your focus should be on identifying what is your top-most priority. Because when your priorities are defined it gives you a big picture. So you know where you have to focus.
I will suggest you to identify your first choice. For example, do you want good trustable, loyal customers or a one-time fling? In my opinion, focus more on customers who will give you business for a long time rather than focusing on wandering customers.
One time fling would be those customers who will never visit you again because some other shop will be giving them better deals at a lower price. Such customers are more interested in prices than the quality of the work.
So you can’t go long-term with them, right? But wait, upon finding out low-quality work is done to their vehicles, they will bring them to your shop once their vehicle is damaged further. Because you are a reliable shop afterall.
When you focus on potential customers, you can repair their vehicles and schedule maintenance appointments to earn from them even during the slow season using the best and easy auto repair scheduling software.
This is how you can manage your cash flow; when other shops are twiddling their thumbs, you will be minting money. Cool, isn’t it?
Try To Convince Your Existing Customers
It’s easy to sell your services to an existing customer rather than a wandering customer or need-based customer. Because they will always get the impression you are a shop that just wants to upsell and drain their pocket.
However, when trust is built between you and your customer you can throw the ball in their court. First, you have to win their hearts by giving them the best services.
So try to sell them complementary services and lure them with discounts. This will positively impact your cash flow. Easily track their previous history with the best auto repair software in the auto repair business.
For instance, last time a customer took oil services, this time you can offer them an air filter change and tell them why they need such repairs.
This is an important tactic that all successful shops offer to their customers. This helps them to sell their services at the point of sale to boost their average sales tickets.
Track Your Invoices
Have you ever missed payments? Ah, we all have been through this once at least. And if you keep doing this in the end you will be having a negative cash flow. And your employees will not be paid timely.
When you won’t pay them on time, they will eventually leave your shop. This is the last thing you should do because it’s not good to have a high employee turnover rate.
Make sure your customers are not slow to pay. Remind them you can easily send them a reminder email with the attached invoice using auto repair invoicing software.
With the auto repair aging module, you can get the aging report and review which customer is not paying you timely or has not visited you for a long time.
Goodbye to the manual calculations. Your software is going to do that for you, just enjoy your happy meal and get all reports with a few clicks.
Less Fees On Card Transactions
Your revenue is being eaten up by credit card transaction fees?
If so, you should research merchant services for small businesses. I understand very well that Running a small auto repair shop comes with pesky costs. The fees you have to pay to accept credit and debit cards are probably the most frustrating.
Go for a payment software that offers debit and credit card processing services, and charges a fee comparable to the wholesale cost of running a card plus a flexible processing fee. Which is based on the card type (debit vs. credit) and reduces your auto repair shop’s costs.
Having a positive cash flow is important because you can plan strategies well before a negative cash flow hits you.
That will hugely impact your business. To avoid chaos like that you use your auto repair accounting software and keep track of your expenses going in/out of your auto repair shop.
Stay ahead of everything in your business. 🤗🤗