Guides · Money

My shop is busy but I can't make payroll. Why?

The bays are full, and you're still moving money around to cover payday. Here's how Nolavi works through it, the same way a good mechanic works on a car: find the concern, the cause, the correction, then verify the fix.

1

The concern

Twice in one month Nate had to move money from savings to cover payroll, even though sales were up.

Nolavi alert that unpaid fleet invoices are blocking auto repair shop payroll cash
The cash was there, just not in the bank.
2

The cause

Nolavi followed the cash. $11,400 was sitting in fleet invoices over 30 days old, and a big parts order was paid early instead of on terms.

Table of unpaid fleet invoices at an auto repair shop by days outstanding
Three accounts holding the cash.
3

The correction

Fleet invoices now go out the same day with reminders at 15 and 30 days, and parts bills are scheduled on their due dates.

4

The verification

Fleet money owed dropped to $3,200, and payroll has been covered from the operating account every week since.

Cash flow results for an auto repair shop after fixing fleet billing
Payday stopped being scary.

How we work. We make changes like this for shops all the time, using each shop's own data. The numbers shown are examples.

Questions

Quick answers.

Why can't a busy shop make payroll?

Money is tied up in unpaid invoices or paid out too early. Sales and cash aren't the same thing.

How do I fix cash timing?

Bill fleet accounts the same day, follow up on time, and pay vendors on their due dates, not early.

Keep reading

See it for yourself.

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