How to avoid 6 common auto repair shop invoice mistakes, plus other invoicing best practices
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Posted on Feb 4th 2020
If you own an auto repair shop or garage, chances are that your auto repair shop is building multiple invoices per day for your customers. In order to save time, hopefully you’re using an auto repair shop management software like Auto Shop Invoice to create invoices quickly and efficiently. However, with so many invoices being created, occasionally we’ll see that auto repair shops will consistently make mistakes in their invoices that lead to confusion and or anger from customers, which leads to a decrease and business and revenue for your auto repair shop. What are some of these common mistakes, and how can you prevent them to ensure your invoices are well-crafted and straightforward for your customers? Read on to find out more!
Surprise invoice charges - Shop supplies
As an auto repair shop owner, your highest priority should be to establish trust and credibility with your customers. When it comes to invoicing there are several opportunities with which your auto repair shop can build trust with customers. However on the opposite end of the spectrum, there are also many opportunities for invoices to break trust with customers as well. Misunderstandings about invoice charges are one of these ways.
What are some of the root causes of these misunderstandings? One of the most common ones is a single little line item that many shops include in their invoices for additional charges related to supplies used during the repair of a vehicle. These are also known as supply charges, supply fees, or shop supplies. Shop supply fees are generally just a small percentage of the overall invoice, however to your customers who do not work in the auto repair industry, this small fee can have big implications when it comes to establishing trust.
To provide some context, here is a common example we use to describe your average customer’s mindset: let’s say your customer walks into a restaurant and orders a cheeseburger. When they receive their invoice or receipt for the cheeseburger, they expect to see only 2 charges: a line item for the cheeseburger and taxes. However, imagine instead of seeing these 2 charges they receive an invoice for the cheeseburger, taxes, and then a few separate line items for the bun, meat, and cheese. The customer is confused, and immediately thinks they are being taken advantage of by the restaurant.
The same analogy applies for auto repair shops and garages as well. Rather than break out shop supplies as a separate line item and potentially confuse and anger the customer, we’d recommend simplifying the invoice by building in the cost shop supplies with repair line items. This way, customers only see one final price for a given auto repair.
If you use auto repair shop management software such as Auto Shop Invoice, then this is good news since it saves you and your auto repair shop’s employees some time by simplifying your invoicing workflow. You no longer need to add additional shop fees for shop supplies, but instead just add a single line item to your invoices for repair and parts combined. In doing so, you’ll ensure your customers do not become needlessly confused by what they perceive as extraneous invoice charges.
Surprise invoice charges - Diagnostic fees
Similar to shop supply fees, another commonly misunderstood invoice charge is the diagnostic fee. In our experience, auto repair shops have varying opinions on whether to include diagnostic fees. If you do choose to incorporate a diagnostic fee into your shop (which we recommend), then our advice is to ensure that the fee is not a surprise for customers once they receive their invoice. What do we mean? Simply put, be sure to communicate the diagnostic fee to all potential customers well before they ever receive your invoice, and preferably before they ever enter your garage or auto repair shop. If a potential customer calls you on the phone before coming to the shop, then be sure at that time to disclose the diagnostic fee. And of course, be sure to reassure the customer over the phone that the diagnostic fee will only be applied if your shop spends time and man hours diagnosing the vehicle and the customer decides not to go through with the repair.
Pro-tip: when you’re communicating the diagnostic fee to a customer, it’s also helpful to describe exactly what a diagnosis entails. For example, customers may simply expect that a diagnosis is as simple as retrieving a code using your code reader. Mechanics and auto repair shop owners know that it’s rarely that simple or straightforward. So be sure to talk the customer through some of the potential diagnostic steps and man hours required for a proper diagnosis. In a customer’s mind, this will help rationalize the price of a potential diagnostic fee on their invoice.
For both diagnostic fees and shop supplies, the main lesson is that no fee or line item should ever be a surprise to a customer. All charges and potential charges should be communicated upfront. It’s important that garage and auto repair shop owners always keep open lines of communication with their customers. Otherwise the potential for conflict, unhappy customers, and misunderstandings will increase.
Non-descriptive invoice line items
Most auto repair shops and garages have their own systems for organizing parts and labor on invoices. When creating your invoice line items, be sure to remember that customers will be reading through the same items as your employees that are building the invoices. Ensuring that the line item descriptions match the expectations of your customers is best practice.
Many of your customers will most likely skim through the invoice to ensure that everything looks correct, however some customers may take the time to read through each line item. If a customer encounters that isn’t clear or sees more line items than they expect, they’ll become confused. Confusion is definitely not the reaction you want to get from your customers when they read your invoices. Because of this, it’s beneficial to incorporate as much descriptive language as possible when crafting your invoice line items.
If you need additional invoicing flexibility, the Auto Shop Invoice software allows auto repair shop owners and employees to create custom line items and labor rates for their invoices. Additionally, our team has added the ability to create a custom invoice footer in case there’s a need for additional descriptions or explanations on the line items of an invoice. Use these tools to help ensure the line items of your invoice are crystal clear to your customers.
No branding or invoice personalization
According to Forbes, consistent branding will increase your company’s revenues by up to 23%. To put it another way, branding is crucial to helping your customers establish a relationship between phenomenal customer service experiences and your auto repair shop or garage’s business. One of the ways many auto repair shops miss out on building customer loyalty by neglecting to add custom branding to their invoices.
Auto repairs and garages are unique from other businesses. When it comes to auto repairs and garages, customers only have a few touch points with your business. Here’s what we mean: most likely, a potential customer will call in to your auto repair tech or service writer to setup an appointment. They’ll drop off their car and then get another call with the diagnosis. Later, they’ll return to your repair shop to pick up their car and pay for the repair. Other than their 2 or 3 conversations with your repair shop’s employees, the only memento of their interaction with your shop is any invoice or email they receive after the repair is completed. Since there are so few communication touchpoints that a customer has with your auto repair shop, it’s important to maximize each touchpoint as an opportunity to build your brand.
What do we mean by branding? Simply put, branding is a word or symbol that distinguishes your shop from your competitors. It only takes a split-second for customers to get a first impression of your brand. If you’re neglecting to add any kind of custom branding to your invoice, then you’ve missed out on an opportunity to brand your business. That’s why we added the opportunity to add custom branding to any invoices built using Auto Shop Invoice’s software. You can use this and similar features to add a custom logo, for example, to the header of your invoices. This will in turn help customers establish positive associations between your branding and the excellent customer experiences that they have with your auto repair business.
No specified due date on invoice, if not paid in full
Nowadays, the majority of repair shops require invoice payments from customers upon receipt of their repaired vehicles. However, if you work in an auto repair shop that allows customers to setup a payment plan for repairs, or allows payment at a later date, then this tip is for you. Be sure that the terms and timeline of potential future payments are clear on your invoices. Any ambiguity on this is subject to be misinterpreted at a later date, which can lead to a poor customer experience and your auto repair shop not receiving the full payment for your garage’s labor, time, and parts. It’s important to have written documentation about customer payment plans, otherwise a dishonest customer could refuse to pay the invoice in full and simply say they were unaware of terms of payment.
The custom invoice footer and internal notes features by Autoshopinovice are perfect for this scenario. These versatile software features allow your auto repair shop’s employees to make either customer-facing or private notes about any potential payment plan. If you need to add notes that only your garage’s employees should be able to reference in the future, then make a note for future reference in the internal notes section of your invoice. Or if you’d like to give the customer a friendly reminder on the invoice about their upcoming payment dates and amounts, then the custom invoice footer will act as a customer-facing reminder. Combined, both of these features provide the flexibility to customize your invoices to accomodate for unique scenarios such as invoice payment plans. Don’t neglect to include payment terms in your invoices, otherwise, you’re setting up your auto repair shop for needless headaches down the line.
Not showing courtesy and gratitude to the customer
One final invoice pitfall that many auto repair shops face is neglecting to show courtesy and gratitude to their customers. Unless your auto repair shop or garage is in a small town, customers have multiple choices in where they can bring their vehicles for repairs. If you’re looking for ways to distinguish yourself from the competition and drive your garage’s revenues and growth, then consider using your invoices as a way to show courtesy and gratitude to customers.
This is another scenario where the invoicing software from Auto Shop Invoice allows for a competitive advantage. The software’s custom invoice footer let’s your auto repair shop’s employees add a custom message at the bottom of each invoice. Whether you write a small message saying Thank You to a consistently loyal customer, or make a special note to wish the customer a happy birthday, the versatility of the custom invoice footer field leaves many possibilities with how you build trust and show gratitude to your customers. By going the extra mile, you can ensure that your customers have the best possible experience from start to finish in their interactions with your auto repair shop.
We hope you enjoyed these six recommendations for ways to avoid common pitfalls when building your garage or auto repair shop’s invoices. These examples show that you can use invoices as a tool to distinguish your brand and product from any competitors, which will lead to additional business for your auto repair shop in the future. If you’re interested in seeing the full capabilities of Auto Shop Invoice’s shop management, CRM, and invoicing software, then sign up for a free trial today.