Days on the lot are the profit lever
Rent, booth financing, salaried staff and insurance accrue by the day; revenue arrives by the repair order. Cut the average time a car spends in the shop and the same building, people and fixed costs produce more ROs a month, which is why cycle time beats price as the lever a collision shop actually controls when programs set the rates. Insurers watch it too: length of rental sits on every program scorecard, so slow files quietly cost future volume along with current margin.
We split the number before managing it. Keys-to-keys counts every day the customer is out of the car; touch time counts the days someone is actually working on it. A wide gap between them is not a production problem but a flow problem: cars checked in before parts arrive, teardown happening in the booth's queue instead of at intake, files idling in a supplement approval loop. The fixes are scheduling and parts discipline, and a monthly trend line shows whether they are taking hold.
Procurement is the margin the estimate left you
The estimate fixes what the shop gets paid for parts, so the buy price is the only variable still in your hands. We track procurement margin by supplier: the discount actually achieved against the estimate's price, the OEM programs used, alternative and recycled parts where the payer allows them, and a returns discipline that chases every credit until it lands. Paint and materials behave the same way. The allowance formula fixes revenue per refinish hour, so the jobber agreement decides the margin, and prepaid paint deals or volume rebates cut the unit cost while tying the shop down at the same time; we price both effects before a renewal, never after one. The RO-level records feeding all of this are the ones described on our body shop accounting page.
Storage is a policy, and sometimes a warning light
Storage on total-loss and non-drivable files, billed to the insurer at a posted daily rate from a documented start date, is real revenue, and shops leave a surprising amount of it uninvoiced. A lot crowded with the shop's own half-finished repairs is the opposite signal: those cars bill nothing per day and burn cycle time while they sit. So the CFO treatment is twofold: a written storage policy applied and invoiced completely, and a lot count on the monthly report read as a flow gauge rather than a comfort. Both numbers come from the same place, the management system's lot report, so keeping them honest costs the front office almost nothing.
Choose DRPs like a portfolio
A direct repair agreement trades rate for volume, and whether the trade pays only shows up in the shop's own numbers. Before any renewal we score each program on the same five measures:
| Measure | What it tells you |
|---|---|
| Effective labour rate against your door rate | The real discount the volume is buying |
| Materials allowance against actual cost per RO | Whether refinish-heavy work on this program pays |
| Supplement approval days | How much unpaid work in process the program parks in your bays |
| Days to payment and short-pay rate | The financing cost of carrying the receivable |
| Share of total sales | What happens to the shop if the program ends |
The output is a mix decision, not a verdict: which programs earn growth, which get held, and how much retail and customer-pay work to protect at the door rate as ballast. A shop holding its own numbers can renegotiate terms; a shop without them can only accept or walk. Concentration gets a hard ceiling of its own, because a program that quietly grows into half the shop's sales turns every renewal letter into an ultimatum.
The cadence, and the money behind it
Our Fractional CFO service turns this into a rhythm: a monthly package with cycle time, procurement and materials margins, storage billed and the DRP scorecards beside the financial statements, then a standing working session to decide what changes next. The receivable lag DRP work creates is also a financing question, so we size the operating line to insurer payment days rather than to hope, and when a booth, a second location or an expansion needs a lender, Business Financing Advisory writes the package the way credit desks read, drawing on Walla Assaf's years on the banking side. Scope and fee arrive as a written quote after a free 15-minute discovery call, for collision shops across Mississauga and the GTA.
