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If you run an independent bodyshop, your bank balance is only one part of the cash flow picture. Here are the three numbers you should check every Monday morning to understand the financial health of your workshop.
Running a bodyshop is about much more than repairing cars. You have technicians to pay, parts to buy, paint and materials to order, energy bills to cover and customers waiting for their vehicles back on the road.
And then there is the other side of the equation: getting paid.
For many independent bodyshops, the problem isn’t a lack of work or even a lack of profit. It is the gap between paying for the repair today and receiving the money for it later.
Industry data indicates that bodyshops can face payment cycles of 30–90 days or more, while continuing to fund labour, parts, materials and other operating costs.
That’s why your bank balance shouldn’t be the only number you look at every Monday morning.
There are three numbers that can tell you far more about what’s really happening in your business:
Let’s look at each one.
Your shop floor might look busy, but how much money is actually sitting in vehicles that haven’t yet been completed and invoiced?
Work in progress (WIP) is one of the most important numbers for a bodyshop owner because every unfinished repair represents money you’ve already started spending.
You’ve potentially paid for:
But until the repair is completed and the invoice can be raised, that money isn’t coming back into your bank account.
A growing WIP figure isn’t automatically a problem. It can mean your workshop is busy and taking on more valuable repairs.
But if WIP is increasing faster than your completed and invoiced work, it could be a warning sign.
Ask yourself every Monday:
“How much money have I got tied up in cars that I’m still working on?”
That figure gives you a much better understanding of your immediate cash requirements than your bank balance alone.
The second number is your debtor book.
How much money have you already earned, invoiced and are now waiting to receive?
This is particularly important for bodyshops working with insurers, accident management companies, fleets and other commercial customers, where payment can take considerably longer than the time it takes to complete the repair.
Imagine your bank account shows £40,000.
That sounds reasonable.
But what if you also have £200,000 of legitimate invoices outstanding?
Your business isn’t necessarily short of money. It may simply be waiting for money it has already earned.
That’s a very different problem.
Every Monday, look at:
You may quickly identify that your biggest cashflow problem isn’t your sales or margins – it’s the length of time between completing a repair and receiving payment.
The third number is perhaps the most useful for managing the week ahead.
Don’t just ask, “What’s in the bank?”
Ask:
“How much cash is coming in this week, and how much needs to go out?”
Look at your expected receipts alongside your immediate commitments.
That could include:
If £75,000 is due to leave the business this week but only £45,000 is expected to come in, you have identified the problem before it becomes a crisis.
That’s the key.
Cash flow management isn’t just about knowing what happened. It’s about knowing what’s coming.
This is where understanding your working capital becomes important.
If your WIP is high, your outstanding invoices are growing and your weekly cash position is becoming tighter, continually increasing your overdraft may not be the best long-term answer.
The underlying issue could simply be the timing difference between paying for repairs and getting paid for repairs.
This is where invoice funding can provide an alternative.
Accident Credit Group specialises in funding solutions designed around the cashflow challenges faced by businesses in the accident repair sector. Rather than waiting for eligible invoices to be paid according to the contracted payment cycle, funding can help provide earlier access to money tied up in those invoices.
For a growing bodyshop, that can mean having more working capital available to support day-to-day operations, take on additional repair work and reduce reliance on an overdraft.
The market is becoming increasingly capital-intensive. Modern vehicles require more diagnostics, ADAS calibration, software, specialist equipment and technician training, while repair values and costs continue to increase.
That makes cashflow management increasingly important.
Before you get caught up in the week’s repairs, take five minutes and write down three figures:
Those three numbers tell you considerably more than your bank balance on its own.
Because a bodyshop can be profitable, busy and growing, and still find itself short of cash.
The strongest operators understand that profit keeps the business worthwhile, but cash flow keeps it moving.
And when more of your money is tied up between completing repairs and getting paid, having the right funding structure in place can give you greater control over the cashflow cycle.
Want to understand whether invoice funding could work for your bodyshop? Accident Credit Group can help you look at your current cash flow, debtor book and funding requirements and assess whether there is a more effective way to fund your growth.
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Contact one of our team if you have any questions
01925 591 540