Bookkeeping for Appliance Repair: Parts, Service Calls and Warranty Claims

What appliance repair books need to track

An appliance repair job is not one number. It is a service call, the part you swapped, the drive to the house, the labor on the call, and the payment that came in. Each one needs its own line so the profit per job is real.

When you track all of it by job, you can see which calls paid and which ones cost more than they brought in. When you do not, you get one big pile of parts, one big pile of labor, and no way to tell which washer was the good job.

Most shops run a few calls a day. A tech drives out, diagnoses the machine, swaps the part, and bills the customer or files a warranty claim. Each call has its own costs. Each call has its own pay. When the books tie the two sides together, the shop makes sense. You can read more about how we keep these lines tied on our bookkeeping page.

Here is what a clean job looks like.

When each line ties to the job, the pay is real. When they sit in one pile, you are guessing.

How parts and van stock show up in your books

Parts are the biggest variable cost on most appliance calls. Techs keep stock on the vans so they can fix the machine in one trip. The way you track that stock changes what your books show.

The clean way is to hold the parts in a parts inventory account until a tech pulls one for a job. When the part goes on the truck, it stays in inventory. When the part goes on the machine, the cost lands on that job. At month end, you count the van stock and the shelf stock and match the count to the books. When the two agree, the parts side is clean.

The messy way is to expense every parts buy the day you buy it. Now every job looks free on parts, and the parts bill looks huge. No one can tell which job ate which part. The next bid gets built on numbers that do not show what the last job cost.

Here is how to keep parts clean.

• **Hold parts in an inventory account: ** until a part goes on a job.
• - **Tie each part to the job: ** the cost lands when the part goes on the machine.
• - **Count the van and shelf stock: ** each month, match the count to the books.
• - **Watch the slow movers: ** old parts that never sell tie up cash.
• - **Keep returns and cores apart: ** a returned part goes back to inventory, not to a new cost.

When the parts side ties to the job, your profit per call is real. When it sits in one flat cost, the good calls and the bad calls look the same.

How service calls and labor tie to the job

Labor is the tech time on the call. It is the diagnosis, the swap, and the test. It is also the drive. When labor lands on the job, you can see what each call cost you in time.

The clean way is to track tech time by call. The clock starts when the tech gets to the house and stops when the work is done. The drive time is part of the job it served. When you run payroll, the wages for that time land on the job. You can see what labor cost on each washer.

The messy way is to book all tech wages to one labor account and forget the job. Now every call looks the same on labor, and you can not tell which tech is fast and which one is slow. You can not price the next call right because you do not know what the last one cost in time.

Here is how to keep labor clean.

• **Track tech time by call: ** start time and end time on each job.
• - **Include the drive in the job: ** the time on the road is part of the call.
• - **Run payroll and tie it to the job: ** the wages for the time land on the job.
• - **Compare techs on the same kind of call: ** see who is faster.
• - **Watch the labor percent per job: ** if labor eats more than half the bill, the call is too cheap.

When labor ties to the job, you can see if your rate pays. When it sits in one pile, you are guessing.

How warranty claims sit apart from cash work

Warranty work is a different animal. You do the work now and get paid later. The parts and labor go out today. The reimbursement comes in weeks later. When the two sides do not sit on the same job, you can not tell what a warranty call really paid.

The clean way is to keep warranty parts and warranty labor in their own lines, away from the cash calls. Book the warranty labor to a warranty labor line. Book the warranty parts to a warranty parts line. File the claim for the amount you billed and tie it to the job. Record the payment when it clears the bank and tie it to the same job.

The messy way is to mix the warranty work in with the cash calls. Now the cash calls look like they cost more than they did, and the warranty work looks like it paid more than it did. You can not tell which warranty company pays on time and which one pays short.

You can read more about how we tie warranty reimbursements to the bank in our warranty reimbursements guide.

Here is what to keep apart.

• **Warranty parts in a warranty parts line: ** away from cash parts cost.
• - **Warranty labor in a warranty labor line: ** away from cash service labor.
• - **Warranty mileage in a warranty mileage line: ** the drive to the call is a real cost.
• - **Tag each line to the job: ** so the warranty job total is real at month end.
• - **Note each short pay and denial: ** so you see which company is worth the work.

When the warranty side sits apart, both halves of the shop stay clear. When it sits together, the story is lost.

How card payouts reconcile to the bank

Most appliance repair customers pay by card. The card processor takes its fee and sends you one payout that rolls many calls into one deposit. The payout is not your sales. The fee is a real cost.

The clean way is to record the gross charge, the fee and the net payout. The gross charge is the sale. The fee is the cost. The net payout is the cash. When the net payout matches the bank deposit, the processor is clean.

The messy way is to book only the net payout and skip the fee. Now your sales look smaller than they were and the fees do not show. Over a year, those fees add up to a big number that sits nowhere.

Here is how to keep the card side clean.

• **Record the gross charge: ** the full amount the customer paid.
• - **Record the fee: ** the amount the processor kept.
• - **Match the net to the bank: ** the cash that landed should tie out.
• - **Keep the processor apart: ** if you take more than one, each gets its own lines.
• - **Watch for holds and reserves: ** some processors hold cash back for a while.

When the payout matches the bank, the card side is closed for the month. When it does not, the gap is the first thing to fix.

How the month end close works

At month end, every call needs its lines added up. The parts, the labor, the mileage, the warranty claim and the net payout all pull together into one job total. The income for the job sits next to it. The difference is the profit for the job.

We start with the bank. We match each card payout to the deposit that landed. We match each warranty reimbursement to the claim it belongs to. We tie each part to the job it went on. We count the van stock and the shelf stock and match the count to the books. Then we add up the job. We send you the profit and loss report and a balance sheet. The job totals sit inside the report.

Here is a simple month end check.

• **Match each card payout to the bank: ** every deposit cleared.
• - **Match each warranty reimbursement to a claim: ** no orphan pay.
• - **Confirm each part ties to a job: ** no orphan parts.
• - **Count the van and shelf stock: ** match the count to the books.
• - **Add up the job total: ** the parts, labor and mileage on the right call.

When the close runs every month, the shop stays clear. When it skips a month, the calls stack up and the next month is harder to close.

A situation we clean up

The van parts that never tied out

An appliance repair shop keeps parts on the tech vans. Parts get bought in bulk and expensed right away. When a tech pulls a part for a job, the cost already sat in one big parts line. At month end, the parts bill is high but no one can tell which job ate the parts or what is still on the vans. The owner can not tell which calls paid and which ones cost the shop.

Here is how we handle it. We set up a parts inventory account. We move the bulk parts buys into inventory instead of a flat cost line. We count the van stock and the shelf stock. We tie each part pulled to the job it went on. When the job bills, the part cost lands on that job. When we are done, the owner can see what each call cost in parts and what is still on the shelves. We set up a rule so the next parts buy lands in inventory from the start.

Mistakes we fix

• Parts expensed at purchase with no inventory account
• Tech wages booked to one labor line with no job tag
• Warranty parts mixed with cash parts cost
• Card payouts booked as sales with no fee line
• A warranty claim filed but never tied to a reimbursement
• Van stock never counted so the parts total drifts
• Mileage left out of the job so the labor looks low
• No match between the card payout report and the bank

Common questions

Do I need a parts inventory account? Yes. When you hold parts in inventory until they go on a job, your parts cost matches the work you did that month. When you expense parts at purchase, every job looks free on parts and the parts bill looks huge.

How do I track warranty work apart from cash work? Book warranty parts to a warranty parts line and warranty labor to a warranty labor line. File the claim, tie it to the job, and record the payment when it clears the bank. Keep it away from the cash calls.

Do I record the card payout or the gross sale? Both. The gross charge is the sale. The fee is the cost. The net payout is the cash. When the net matches the bank, the card side is clean.

How do I count the van stock? Pick a day each month. Count what is on each van and on the shelf. Match the count to the parts inventory account. The gap is the parts that walked or the count that was off.