When April’s accounts close, a repair shop has three awkward figures. Parts are $1,800 over budget, overtime is $640 higher, and cash is down despite stronger sales. The owner has to trace each figure back to the month’s work before changing the budget.
The answers are usually close by. They sit in job cards, supplier invoices, staff hours, customer terms, and the electricity bill.
Check the Work Behind the Number
The shop expected to spend $12,000 on parts. It spent $13,800. Before anyone calls that overspending, the job count needs checking.
If the mechanics completed more repairs, the extra parts were needed. Cost per job may still be close to plan. If the job count stayed flat, the parts invoices deserve more attention. A supplier increase, wasted materials, or a buying mistake becomes more likely.
Timing can bend the monthly figure as well. The parts manager might order filters on April 29 because the shelves are running low. Those filters appear in April’s accounts even though most will be used in May.
The percentage gives the $1,800 some scale. It is 15 percent above the parts budget. That sounds large, but percentages need context. A 15 percent difference on shop towels does less damage than a 3 percent payroll miss.
The Same Gap Next Month Means More
One high overtime figure can come from a repair due on Monday. The foreman opened on Saturday, two mechanics came in, and the job was finished. That explains April, but not yet May.
May changes the picture if overtime is high again. By June, the shop may have more work than the weekday schedule can hold. Another lift, a later closing time, or an extra mechanic might be needed. Cutting overtime without looking at booked work could simply move jobs into the following week.
A short note beside April’s figure saves time later. “Fleet van finished Saturday for Monday pickup” is enough. If the same kind of note appears every month, the schedule has changed even if the budget has not.
The year-to-date column matters for the same reason. A cost can miss the monthly budget twice and still sit close to plan for the year. Another cost can creep up by a small amount each month and become a real problem by autumn.
Power Use and Power Price Are Separate Issues
The shop’s electricity bill also came in high. April had two Saturday shifts, and the air compressor ran longer. That extra use belongs in the explanation.
The bill still needs to be checked against meter use and the number of billing days. A longer billing period can make one month look worse. So can a new welder, an old compressor cycling too often, or a bay door left open while the cooling system runs.
After usage is understood, the plan can be reviewed on its own terms. Texas owners looking at small business electricity rates in Texas can compare available plans using the business address and actual usage. A headline rate by itself says little about what the shop would have paid.
The order of those checks matters. A new plan will not repair the compressor. Servicing the compressor will not change a poor contract. The budget review should show which problem the owner actually has.
A Busy Month Can Still Be Short of Cash
The sales figure is above budget because the shop took on a fleet account. On paper, April looks good. The fleet customer has 45 days to pay, while parts suppliers expect payment sooner.
Wages leave the bank every Friday. Card fees are taken as customers pay. Parts for the fleet vans were bought before the first invoice went out. The sale is in the accounts, but much of the cash is still sitting in accounts receivable.
Margin needs a separate look. The fleet customer negotiated a lower labor rate in return for regular work. That agreement may still be worthwhile, although the shop cannot judge it from revenue alone. Parts margin, mechanic hours, collection time, and rework all affect what the account leaves behind.
Inventory can produce a similar gap. A shelf full of oil filters has value, but it does not pay Friday’s wages. If stock keeps rising faster than completed jobs, the shop is buying earlier than it needs or carrying items that move slowly.
The income statement records the new sales, but the bank does not yet hold that money. The SBA’s guidance on profit and cash flow notes that credit sales can remain in accounts receivable while inventory still uses cash. Accounts receivable shows how much is still due, while inventory shows what has been bought but not sold.
Leave Notes That Survive the Month
“Parts over” will mean very little in June. “Brake pad price rose $6 per set” gives the buyer something to check. “Ordered 40 filters for May” explains why April was high without pretending the cost disappeared.
The best notes usually come from ordinary records. Job cards show how many repairs were completed. Timesheets show where overtime landed. Purchase orders show whether higher spending came from price or quantity. The aged receivables report shows which customers have not paid.
Account names need to be useful too. A line called “outside services” might contain cleaning, computer support, equipment repair, and bookkeeping. Those costs have different causes and different owners. Lumping them together makes the total hard to manage.
Most small misses can be left alone. The shop might review any line that runs more than $500 over budget, then note smaller gaps that keep returning. The rule should fit the expense. Rent is meant to stay fixed, so even a small change deserves a look, while cleaning supplies naturally move with workload.
Keep the Budget and Change the Forecast
The original budget should remain on the page. SCORE recommends keeping the original budget visible even when market or operating conditions change. Replacing it with actual figures every month removes the evidence of what the business expected. Poor assumptions vanish along with the old numbers.
A current forecast sits beside it. If the fleet work will continue, later months need more parts, more mechanic hours, and enough cash to cover the payment delay. The electricity estimate may also need an update if Saturday opening has become normal.
This is a small job once the causes are known. The owner does not need to rebuild every line. The remaining months only need changes where daily work has clearly moved away from the original plan.
The April review can then end with a few plain decisions. The parts manager checks brake pad quotes. The foreman reviews Saturday bookings. The bookkeeper follows the fleet invoice on its due date. Those actions belong to the numbers that caused them.
By May, the owner should be able to tell whether the shop had an unusual month or has become a different-sized business. That is what the variance report is for. It keeps the budget tied to the work being done in the bays.
