Think staff are stealing parts? Here’s what may actually be happening

If you’re noticing parts ordered are not being invoiced to the customer, your first thought may be that someone is ordering the parts and walking out the back door with them.

But there may be a simpler reason — your staff is too busy to actually charge the customer for those parts, said Hunt Demarest, senior accountant who specializes in working with automotive repair shops with Paar, Melis & Associates.

“People get rushed. People start putting stuff on [the car]. People start going away from the process and procedures,” he said at the Midwest Auto Care Alliance Vision Hi-Tech Training and Expo.

For example, a vehicle may be in the bay and the service advisor tells the tech to put a condenser on it as well. But the item never gets put on the ticket. The tech does the work. The customer picks up the car but only pays for some of the items. They may not even know the part was added. And how would they if it’s not on the invoice?

While maybe it’s not true fraud, think about it this way, Demarest said during the session Protecting Your Company: You would have made $50 on the part. But now you lost $50.

“That’s a $100 swing. We went from making $50 to losing $50,” he pointed out.

Then you have to sell the job twice to make the money back. “We do that job again, we made $50 [but] we’re actually haven’t made any money yet,” Demarest said. “We’re back to break even. And then we do that another time. And now we actually have that $50 back.”

But if this was theft, he added, you can see why it can be so damaging to the business. “Don’t just look at it that you’re out $50 bucks. No, you’re out $100.”

Shop owners should be identifying these pain points with their staff and map out a strategy to avoid such mistakes.