Every number in the shop hangs off a repair order
A collision shop's income statement is really a stack of repair orders, so we build the books the same way. Each RO carries revenue lines that behave differently: body and refinish labour at whatever rate the payer allows, parts at a margin the estimate fixes, paint and materials billed by formula, and sublet for the glass, calibration and alignment work you buy in. The chart of accounts mirrors those lines, so the monthly statement reads the way the shop actually runs.
Estimates already live in Mitchell or Audatex, and most shops run a management system on top of them. We map those exports into QuickBooks Online instead of re-keying invoices, with Dext catching parts invoices and the paint jobber's statement. Gross profit per RO becomes a report you pull, not a research project.
Parts get matched, not assumed. Every parts invoice lands on its RO, returns and credits chase the original charge, and core charges never linger as phantom cost. When the estimate allowed one price and the invoice shows another, the gap surfaces while the file is still open and fixable.
DRP files: the price is set for you, so the ledger has to be sharp
Direct repair program agreements trade steady volume for insurer-set labour rates, capped materials allowances and audited estimates. You cannot negotiate the rate claim by claim, which means the money is made or lost in execution and paperwork. Three things need daily discipline in the books:
- Rate cards by payer. Your door rate and each program's rate are tracked separately, so labour gross profit reports by insurer and you know what every agreement actually earns before renewal time.
- Supplements. Teardown finds damage the first estimate missed. Until the supplement is approved, that work is cost with no matching revenue, so we hold it as work in process by RO. Month-end profit stops swinging with whatever happens to be sitting in an adjuster's queue.
- Receivable lag and short-pays. Insurers pay on their own cycle, and payments often arrive netted against adjustments. Receivables age by insurer, every short-pay gets coded to a reason, and the balance each program owes you is a number you can pull any morning.
Here is how a DRP file moves and what the books must show at each stage:
| Stage | What happens | What the books show |
|---|---|---|
| Estimate approved | Insurer authorizes the repair at program rates | RO opened, revenue lines set to the payer's rate card |
| Teardown | Hidden damage triggers a supplement | Costs accrue; supplement held as unapproved work in process |
| Delivery | Customer pays the deductible and signs off | Deductible receipted against the RO, not booked as other income |
| Settlement | Insurer pays, often weeks later, sometimes short | Payment matched to the RO, short-pay coded and disputed |
Delivery day matters in the books too. The deductible is part of the repair price, collected at the counter and receipted against the RO. How deductibles and insurer-paid HST behave at filing time has its own wrinkles, which we handle on the tax side of the same engagement.
Paint and materials: the line that quietly decides the year
Most estimates pay materials by formula: refinish hours multiplied by a materials rate. Your actual cost is whatever left the mixing room, and the two drift apart fast on blend-heavy and tri-coat work. We book the formula amount as revenue and the paint statement as cost, month by month and, where your mixing-room scale data supports it, RO by RO.
That produces a real materials gross profit line. When it sags you find out within weeks, not after the paint supplier's annual rebate blurs the picture, and you can take the problem to the jobber or to your estimators, whoever owns it. Consumables like abrasives, seam sealer and masking get a simple policy: expense on replenishment, count periodically, never argue at year-end.
Flat-rate techs and commission painters are still payroll
Techs paid on flagged hours and painters paid on commission are employees, with CPP, EI, vacation pay and WSIB premiums riding on every dollar. We run payroll inside the engagement, remit source deductions on time and cost labour at its loaded rate. When a tech turns 50 flagged hours in a 40-hour week, the efficiency and its true cost sit in the same report, which is exactly the view you need before touching a pay plan.
One engagement, RO to T2
Our End-to-End Accounting service puts bookkeeping, payroll, financial reporting and tax filing under one roof. HST runs at 13% on every repair, insurer-paid or customer-paid, and the input tax credits on parts, paint, sublet and overhead are claimed from reconciled numbers rather than estimates. At year-end the same file flows straight into Corporate Tax Filing with no clean-up bill attached.
We work with collision shops across Mississauga and the GTA. Every engagement starts with a free 15-minute discovery call and a written quote, so you know the cost before we touch a ledger.
