Ever feel like you’re paying more for parts than you should be—but can’t quite put your finger on why? Maybe you’ve been charged for another shop’s parts, didn’t get credit for a return, or had a warranty claim that didn’t quite add up. If that sounds familiar, you’re not alone.

This is one of those topics that makes shop owners’ blood pressure rise, but it’s something every shop has to deal with: parts reconciliation. Making sure what you think you paid for parts is actually what you did pay.

Let me start with something simple. You buy a part for $50, sell it for $100, and make $50—easy, right? But let’s say your advisor missed one, or a part got lost, or the wrong invoice came through. Suddenly, you’re down $50. To make that money back, you’d have to sell the same part three times. That’s a lot of work just to make up for one small mistake.

I learned this lesson early on when I worked with gas stations. They’d lose a pack of cigarettes and have to sell eight or ten more to make up for it because of their razor-thin margins. The same principle applies to your shop—especially if you’re dealing with tires or other low-margin items.

Now, I know some of you might be thinking, “Hunt, this isn’t theft or fraud—it just happens.” And you’re right. This isn’t about blaming anyone; it’s about realizing where the leaks are so you can patch them. Because whether you know it or not, every single shop is losing money somewhere—cores, washers, consumables, you name it.

The key is figuring out how much loss you’re okay with. That’s what I call materiality—what’s “material” enough to matter. If you’re off by $100 on $20,000 worth of parts, it’s probably not worth spending ten hours to track it down. But if you’re off by $5,000? Yeah, that’s worth digging into. Your time has value too, and you’ve got to know when chasing pennies costs you dollars.

When you start reconciling, compare your shop management system to your financials. Run your reports for the same period and see if what you sold matches what you paid. If it doesn’t, don’t panic—half the time, it’s just a reporting issue. Maybe something’s misclassified, maybe inventory’s off, or maybe you’re mixing in personal or shop vehicle parts without realizing it (and yes, I’ve caught more than one “mystery discrepancy” caused by a client’s race car project).

Once you find where the difference is coming from—wrong vendor, double billing, missed warranty credit—fix it and then build a process to keep it from happening again. Because calling your parts vendor every month for the same missing credit isn’t a solution; it’s a symptom.

Bottom line? You can’t fix what you don’t measure. Whether you’re old-school with pen and paper or using software like Wicked File to automate it, the goal’s the same: tighten up your systems, protect your margins, and make sure the hard work your team puts in actually shows up in your bottom line.