Keeping Your Books ... Better

Oct. 1, 2023
The importance of proper bookkeeping should not be overlooked.

Most shop owners get into the business to service cars for a living, either directly or indirectly—not to sit behind a computer and rack their brains trying to do the books.

So, that’s where Stacy Kildal comes in. The accounting-award-winning bookkeeper and owner of Kildal Services LLC in White Lake, Michigan, has made it her business to help auto shops succeed—without having to worry about their books in the process.

The Backstory

When Kildal took her first accounting class, she was hooked. So, she went straight to work as a bookkeeper for a silent partner in the auto repair industry.

Twenty years later, she still does the books for her first auto repair client, plus a whole fleet more.

From Kildal’s experience, shop owners can usually manage their businesses best and keep them running at top speed by taking their hands off the wheel when it comes to bookkeeping.

“People don’t start their shops to do bankroll reconciliations,” she states. “So, I tell them to find someone to do the books, because you didn’t start your business to do that.”

She adds, “I don’t cut my hair. I find someone to do it.”

One of the key things Kildal says professional bookkeepers can help shops do—saving them money and headaches in the process—is stay on top of sales tax and make sure it’s filed and paid on time.

This service alone is probably more highly prized among shop owners than a 1964 Ford Mustang.

The Challenge

But what if a shop owner is just getting started and can’t afford to hire a professional bookkeeper?

“If you feel like you don’t have the budget, an Excel spreadsheet is free and it works,” Kildal says. “At least you can track with just that … and it makes tax time easier at the end of the year.”

No matter the tool a shop owner decides to use, Kildal stresses, “(Sound bookkeeping is) really important when figuring out your costs, (such as) what percentage of income do I want parts to be versus labor? We want to see 1:1, parts and labor about the same.”

Smart business practices like Kildal describes simply aren’t second nature for most people, though.

“There’s a stat somewhere that shows most small businesses don’t make it past three years. But once you have a good (bookkeeping) system set up for success, you can make decisions based on actual data and not just on feelings,” she notes.

Bottom line: If shop owners want to succeed and grow, they’ll need to see where their sales are actually coming from.

So as soon as a shop owner is able, Kildal suggests, “Budget in somebody to do this stuff for you so you don’t have to worry.”

The Solution

Kildal advises about the basics necessary to make an auto shop run like a champ: “You’re going to want good shop software—a really good foundation with industry-specific software.”

For Kildal, a winning accounting system includes QuickBooks, her chosen bookkeeping tool for which she is designated an Advanced Certified QuickBooks ProAdvisor.

“For quick lubes, you want to know where your customers are coming from,” she notes. “(And) with QuickBooks, you can see where your customers found you.”

Another benefit of QuickBooks software is that it has a full auto repair shop track that takes into account all types of work, even including things like walk-ins and contracts shops set up with local school districts, for example.

Drawing on insights made possible by the software tool, Kildal says shop owners can also determine what buckets to put their marketing money into for the greatest returns.

What if the owner of an established shop currently has accounting and bookkeeping systems in place, but they aren’t sure they’re the best they can be?

“I would say find someone who can come in … set up a back office and make the workflow and practices the best they can be,” Kildal suggests.

She is regularly asked to look over shops’ existing accounting systems to make sure they’re still up to the task of helping businesses grow.

“A Quick Review is what we call it, and we do it often,” she says of her company’s business analysis services. She uses QuickBooks as part of her process, and it helps her determine the smartest marketing moves a company can make.

Of chief concern: “It’s really important to make sure their cost of goods and margins are where they want them to be,” Kildal notes. “What’s the revenue versus parts and labor?”

In other words: As a shop owner, you must make sure you’re making money, she stresses.

And she advises shop owners to up the ante and find someone who can help with search engine optimization (SEO) and marketing to boot. (Kildal sticks to her bookkeeping forte—practicing what she preaches—and has an experienced pro on her team to handle the SEO.)

The Aftermath

Whatever road shop owners take, the long-term business impact of putting a sound accounting and bookkeeping program in place is probably obvious.

“They’re going to be successful,” Kildal states.

“I look at my job as putting puzzle pieces together,” she adds. “(I’m looking for things like) are you doing things to the best of your ability? Can we get your parts cost down? Your labor costs down? What are local dealerships charging, and let’s get your costs in line.”

An auto shop can best track these costs and answer these questions with a really good foundation, Kildal reiterates, with industry-specific software.

“Whether or not it connects to QuickBooks is not a big deal,” she notes. “You (simply) want to have a good accounting software, regardless of what that is.”

The Takeaway

At the end of the day, Kildal shares this advice, drawing from her years of helping auto service businesses run at peak performance: “Don’t do your own books. Get it done correctly. And if you do it early, it will pay off.”

This same wisdom has benefitted Kildal and her own family, where she cut her teeth helping her dad do payroll for his business in the 1980s.

“For my 19th birthday I asked for a filing cabinet!” the pro bookkeeper looks back and laughs.

From the very beginning, the woman named among CPA Practice Advisor magazine’s Most Powerful Women in Accounting (six years in a row) was setting up a business for success.