Effective inventory management is crucial for the success of any business, ensuring seamless operations and customer satisfaction. Neglecting this practice, surprisingly, 43 percent of small businesses in the United States tracking their inventory.
A trend notably prevalent in auto repair industry, where almost 36% of shops struggle with shortages of essential auto repair parts. And why not? When so many parts are moving around your auto repair shops, it is obvious to miss out on parts procured, returned, or need to be ordered.
“A well-managed inventory can increase a company’s profitability and decrease its operating costs.”
Efficient management and consistent tracking allow parts and tools usage in the repair process to be more responsive to your operational demands. However, the best auto repair inventory management includes everything from oil, wheels, and filters to complex engine parts and diagnostic equipment.
Although it’s tricky to manage inventory in auto repair shops, you can’t overlook the adversities of overstocking and understocking. Let’s check out why auto repair shops need an inventory management system and how accurate parts tracking can impact operational efficiency.
The Importance of Precision in Auto Parts Tracking
Auto repair inventory level changes constantly, creating a challenge in tracking parts amid multiple suppliers and diverse categories. Struggles related to managing customer demands across multiple locations add an additional layer of complexity to an already daunting task.
But when you lack precision in managing an auto repair shop’s inventory, it’s easy to overstock and keep pouring money into excess tires or other parts. Also, you run out of parts due to understocking, making customers wait until you receive shipment of demanding auto parts, and eventually losing customers.
It’s obvious as you are not prepared for spikes in demand. Issues like inaccurate numbers, erroneous on-hand balance, or misplaced items contribute to confusion, work, and obsolescence, resulting in skyrocketing garage costs.
An accurate inventory system with robust control across various locations allows you to maintain the right mix of parts and quantities. It makes your work more efficient. It also helps you strengthen vendor relationships and create a reliable relationship with your customers. Most importantly, it helps to expand and scale your auto repair business. To achieve this, outsourcing auto repair accounting is the key. The outsourcing professionals will track inventory levels, monitor costs, reconcile accounts, and generate financial reports related to inventory management.
Outsourced Accounting: A Strategic Solution for Auto Parts Tracking
Outsourced accounting ensures seamless parts tracking, alleviates operational burdens, and positions your business for accelerated growth. Let’s dive into other reasons why outsourced accounting is the best for efficient auto repair inventory management.
Minimize Interruptions – Tracking of purchased and returned parts is time consuming. Also, it often diverts the focus of the critical resources away from core business activities, disrupting the workflow and productivity.
The outsourced accounting partner completes your parts tracking before, during, or after business hours, fitting your schedule and minimizing interruptions. This allows your shop to operate smoothly and enhance productivity by allocating key resources strategically.
Regular Parts Tracking – Regular tracking and categorizing auto parts helps you to identify shrinkage due to theft, damage, or spoilage, enhance staff productivity, and optimize your shop’s performance.
A reliable outsourced accounting firm establishes a systematic approach to auto parts tracking, enabling you to gain complete visibility and properly balance inventory levels.
Stay Organized – It is the key component to streamline inventory management in auto repair shops and franchises. Thanks to outsourcing inventory, you can know what is purchased, installed on a car, returned, or entered inventory, keeping operations running smoothly.
Certified professionals leverage industry specific accounting software to keep inventory records up to date and conduct regular 3-way reconciliation to detect and correct any discrepancies, errors, or losses due to damaged, expired, or missing items.
Optimize Parts Value – Excess parts and stock can tie up valuable warehouse space, affecting the overall shop value.
“Inventory is money sitting on shelves.” – Philip Fisher
Partnering with an outsourcing team can prove instrumental in optimizing parts value.
By establishing efficient processes, the outsourcing team will help you create processes to minimize future obsolescence and make better use of the physical space. By doing so, you can reduce costs and redirect freed up resources toward more valuable purposes like meeting customer demands and attracting new customers.
Mastering the details of auto parts tracking is imperative for accelerating growth and profits. Outsourced accounting emerges as the best way to manage auto repair inventory with precision, unify your team, and minimize conflict. With this strategic move, you can minimize interruptions, ensure regular parts tracking, stay organized, and optimize value. It also contributes to achieving overall operational excellence, enabling you to focus only on fixing cars.