7 steps to create a bulletproof invoicing program so your auto shop or garage’s invoices are always paid
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Posted on Feb 12th 2020
Making sure that your auto repair shop’s invoices are paid on time can be hard work for garage owners. However, once you take some initial time to set up a defined invoice system or program, you’ll be able to save yourself time and heartache down the line. Below are steps to take to ensure your auto shop invoices are always paid without a hitch. After reviewing, be sure to check out our previous post on 6 common invoice mistakes that auto shop owners make.
1. Ensure you have solid auto shop management software in place
Getting a solid foundation for invoice payments starts with choosing the software program your auto shop uses to build and manage your invoices. If you’re currently using carbon copy or paper invoices, we’ve previously discussed the benefits of moving to paperless invoices with a software program, which include time and money savings.
When you’re shopping for auto shop management software, here are a few things to consider:
- Rather than using Excel or spreadsheets, use cloud based auto shop management software that was intentionally designed for convenience and ease-of-use.
- Identify necessary features for invoice building such as a customer database (or Customer Relationship Management AKA CRM) and parts cataloguing.
- Customizability and customization features are essential for your business’s branding.
- Test the software before committing to ensure it meets your needs. Most software vendors offer a free trial before purchasing.
2. Clear input of customer data, labor, and parts data
After selecting your invoicing and auto shop management software, the next step is ensuring you have all invoice components required for consistent invoicing. At a minimum, this includes the following:
- Customer data such as name, phone number, email, and vehicle.
- Parts description and cost
- Labor hours and fees
Once you’ve setup your tax rate, customer, and parts information, this will allow future invoices to be created much more quickly. You’ll be able to save time with any recurring or repeat customers that continue to come back to your auto shop.
3. Set invoice payment terms and due dates
For most customers that come into your garage, auto shop repairs don’t come cheap. AAA says that the average cost of auto repairs in the United States is between $500-$600 dollars. Since auto repairs may be expensive, you’ll want to be clear about when and how your auto shop expects payments.
Does your auto shop accept cash only? Credit cards? If so, which credit cards do you accept? Be clear about the types of payments you accept to avoid uncomfortable conversations down the line.
If your shop offers payment plans, then be sure the terms of payment are listed clearly on your invoices and are communicated early on to the customer. If there are additional fees for missing payments, be sure these are outlined clearly as well. Avoiding scenarios where the customer is hit by an unexpected or uncommunicated bill is best practice.
In addition to considering worst-case scenarios, think about ways to build customer loyalty too. To reward your regular customers, you can consider offering discounts to loyal customers that come to the shop frequently and make payments on time. This is a great way to build trust and establish more regular customers in the future.
4. Design and customize invoices with a custom logo
Forbes has stated that consistent branding can increase your business’s revenues by up to 23%. What this means for you: if your garage or auto repair shop doesn’t have a custom logo or branding on your invoices, you’re missing out on an opportunity for additional revenue and follow-up business.
A professional invoice is a reflection of your business and your business’s reputation. Invest time in thinking about a marketing and brand strategy when it comes to your invoices. To summarize, most invoicing software should allow for the following features at a minimum:
- Your customized logo
- Clearly defined payment terms
- Itemized list of repair parts
- Your auto shop’s contact info
- Personalized message of thanks to the customer
5. Stay organized and keep track of all invoices
Customer payment disputes are bound to happen in any auto repair business. Because of this, it’s crucial that you and your garage keep meticulous records when it comes to bookkeeping. Auto shop management software will help with this, however ultimately the responsibility lies with the shop owner to ensure that employees are properly trained and equipped to keep accurate records.
For hourly labor rates, be sure you have a program in place to tally hours worked. The same applies for parts and customer data. Always keep any physical paper documentation neatly stored in a filing cabinet, although we recommend making the switch to paperless.
The last thing you’d want is for an invoice to fall through the cracks, only for it to be contested at a later date by a customer. If you only have one copy of your invoices, then the customer may have grounds in a lawsuit to avoid payment. So save yourself and your business the potential hassle of an invoice dispute by keeping immaculate records.
6. Know when to bring in third party help
Invoicing is a key part of any auto repair business. But when it comes to building an effective invoicing program, sometimes it makes sense to hire outside of your shop for assistance.
For example, one unfortunate reality may be that you have some customers who simply refuse to pay their invoice. In these scenarios it can make sense to hire an outside collections agency to assist with collecting payments, rather than needing to take on this added responsibility yourself.
Or another example, let’s say you need help with training and setup of your auto shop management software. Most software businesses have dedicated employees or partners that specialize in implementing software into existing businesses. Be sure you take advantage of these specialists.
Finally, if you’re looking for someone to handle your bookkeeping and invoices come tax season, hiring a tax accountant may be to your benefit. This frees you and your employees to continue unhindered with your auto repair work.
7. Be kind and gracious
Customer service is a big part of how auto shops and repair businesses keep an edge over their competitors. That’s not just limited to direct interactions with customers though. Kindness and generosity can also be applied to invoices too.
Personalized notes of thanks and gratitude in your invoice go a long way in building customer loyalty. At the end of the day, customers want to feel appreciated for choosing your business. In addition to creating a professional presence, your invoices are also an underutilized way to build a relationship with your customers. At the end of the day, the trust and goodwill you build will pay dividends to your auto shop in the shape of repeat and regular customers. That means more invoices in the future for your business.