How to set up and run your accounts as a mechanic

3 years ago

If you’re running a car garage, or about to set up as a mechanic, you’ll need a firm steer of your accounts to keep customers happy, staff safe and suppliers properly managed. Having well-organised accounting procedure can help you reduce overspending and grow your business too.

Recognising each element of modern bookkeeping will help you to organise them separately, so it doesn’t seem like such a big job. Work these different parts into your daily or weekly tasks find a routine that suits you.


How to manage quoting and estimating

Everything starts with a quote, whether you’re working for an individual or doing a job for a business fleet. By streamlining the process you can book customers in more quickly and keep track of quotes to chase up. Use a template quote with your branding, contact details and VAT or company numbers. It is also helpful and time saving, to keep a record of labour costs and common supply costs close at hand.

The quicker you get the quote to a customer the more quickly they are likely to book the job in!


Invoicing and getting paid quickly

Your quoting system can help you to invoice quickly, if you use the same process and template you can turn a quote into an invoice. This reduces data entry and helps you get paid quickly.

Make sure to include clear payment details, or use a service like Sage One which includes a live Pay Now link. Consider how you will take phone payments too, as many customers will do this before they pick up their vehicle.

You may also be dealing with business customers; being able to invoice them promptly ensures that your paperwork reminds at the front of their mind.


Managing parts and stock

Much of your business depends on whether you have the right part to fix your customer’s car on time. An organised set of accounts allows you to keep track of the stock you’ve ordered – meaning you know when you expect a delivery and when to re-order.

You’ll also be able to keep a tight control over your cash flow.  Running supply reports can also allow you to budget for monthly, quarterly or yearly part costs, and pay suppliers on time.


Pricing for labour

Your main business is providing a service, so it is vital that your labour costs are an accurate representation of your costs. Being able to have a clear view of what your salaries, premises and other running costs are will allow you to set a realistic labour cost.

You can also dig further and define which jobs may be particularly costly, for example if they require two people, and add extra costs.


How to manage your staff

In managing your staff you need to think about salaries, tax, national insurance, pensions and also health and safety. Whether you employ 5 or 15 people there are a few ways you can keep your staff happy and also minimise the amount of time you spend on HR and admin.


Salary and PAYE
It is now easier than ever to run payroll with automatic calculations and PAYE calculators. No more guesswork!  You can reduce payroll errors and ensure you are keeping up with tax obligations.

Try Sage One Payroll which automatically calculates all the numbers for you, and keeps you HMRC compliant.


Health and safety
A car garage doesn’t have to be a hazardous environment if all the risks are managed properly. Ensure you do all the necessary risk assessment associated with manual handling, heavy machinery and chemical use.

The Motor Vehicle Industry Guides on the HSE website help you put in the right procedure.


Staff development and apprentices
An organised set of accounts will let you review costs regularly to help develop your team – this could be with new hires, staff training or appraisals. For many garages, apprentices are a good way to grow your team and offer opportunities to young people. Find out more about apprenticeships on the GOV.UK website.


Accessible from everywhere
Access Sage One Payroll from your computer, tablet or mobile phone. Check calculations and be prepared for pay day when you’re not on site.


Easy to use
Manage your payroll as often as you need to with a few clicks of a button, ideal if you are short on time or need a quick daily routine to stay on top of your figures.


Checklist: Key accounting dates to remember

There are a few dates you and your accountant (if you have one) need to keep to through the year, generally relating to salaries and tax. Here is a reminder of them:

  • PAYE, NICs and CIS for Employers: Must reach HMRC no later than the 22nd day of the month, following the month or quarter the payments relate to.
  • Corporation Tax: Due annually nine months after the end of your company’s accounting period. Must be paid electronically
  • VAT: cleared funds must reach HMRC by the seventh calendar day after your standard due day. Add three days if you are using direct debit.
  • Self-assessment tax return: You can complete your return as soon as the tax year ends. Payments must be received by the 31 January each year, and a balancing payment must be made on the 31 July each year. You must fill in a return even if you have no payments to make.

Check the GOV.UK website for full guidance on the year’s deadlines.


Sage One Accounting integrated with Sage Payroll and Sage Pay can help you keep on track of everything financial for your garage. Our software is specifically designed for busy small businesses; it is easy to use, compliant and can be accessible from any device. Some of the features of Sage One include:

  • Create professional quotes and invoices
  • Integrate with Sage Pay to take customer payments online and by phone
  • Integrate with Sage Payroll to automatically calculate salaries and wages
  • Collaborate easily with your accountant
  • Manage suppliers and payments
  • Create most common bookkeeping reports including outstanding invoices, staff costs and profit and loss
  • Cloud-based for access anywhere, on any device

Get a free trial of Sage One, or sign up today for 20% off.