Nov 19, 2022

A Shop Owner’s Guide to Collections

A Shop Owner’s Guide to Collections

Does this sound familiar?

You’ve repaired a truck or other heavy-duty vehicle for a customer. Being the gracious repair shop that you are, you let them pay within 30 days.

A month comes and goes. No payment arrives.

Maybe you nudge them. A call, an email, a letter.

Still nothing.

Another month passes.

The customer is now 60 days behind.

At this point, something has to give. Well—to be fair—something had to give weeks ago, when the customer first failed to pay up. But repair shop owners, we’ve found, are nothing if not considerate—they’d much rather give a person a chance to settle up properly than immediately start pursuing other options.

But sometimes those other options are necessary.

Today we’re going to talk about what you can do if a customer ghosts you or otherwise doesn’t pay up.


If a customer stiffs you, you probably won’t go straight to a collection agency. You may wind up there, but usually you’ll have a few steps in between “Hey, you’re late on payment” and “WHERE’S MY MONEY?!?!?!”

These can include friendly reminders in the form of emails, letters, or phone calls.

“We try to reach the customer first, or anyone at the company to [reach] a resolution,” Ashley Sowell of Integrity Fleet Services in Texas tells us. She notes that they also reach out to the bank or financial institution involved.

If they manage to get hold of a live person, Ashley says, they will offer payment plans. “We try to work with them if they are willing to work with us,” she says.

Some larger operations have or can hire someone to deal exclusively with chasing down money. But a lot of smaller shops don’t have that option. It’s the owner or a manager going after lost cash, and that means more lost cash—because you have a regular job to do, too, that you are ignoring to chase down revenue owed.

It’s not just a loss in time you need to worry about. There are certain rules you need to follow when collecting a debt, to say nothing of dealing with potentially hostile customers.

So, some shops turn to collection agencies.


We chatted a bit with Robert Gilbert, Fullbay’s Vice President of Finance, about what goes down once you sign with a collection agency.

The first thing you should know is that the collection agency is usually the last resort. You’ve probably read horror stories about collection agencies calling over and over again to pick up some kind of missed bill, and the credit damage that can follow.

The second thing you should know is that collection agencies aren’t cheap. If you’re going after a customer for $10,000, you won’t be seeing that full $10,000 hitting your bank account.

Fees will vary by agency, but you can expect to pay them between 20% and 50% of what you originally charged for the repair. “Your margin probably wasn’t 50% of that bill,” Robert says.

Still, it’s some money. And at this point, most of us will take some over none.

You may send the customer a couple of notifications that their bill will be sent to collections if they don’t pay. This isn’t required, but it can be the nudge some late-paying customers need to settle their bill.

So, provided you hire a collection agency, how long will it take for you to see the money? That depends. It may take them some time to find your errant customer. The U.S. doesn’t have collection time limits in place, but your state may restrict you to a few years.

A collection agency also isn’t a guarantee that you’ll get your money. Some shops we spoke to had successfully used them; others had not. Sometimes the agency can’t track down the customer, and sometimes there is simply no money to be had.

If your customer is seriously in arrears—say they owe you $100,000—then you may want to bypass collections and go straight to court. This will also be expensive (lawyers aren’t cheap), but with that much money on the line it may be easier for you to let the wheels of justice do their work.


Another way to recoup your expenses is through a mechanic’s lien.

This can be a long and time-consuming process with a lot of requirements and stipulations, Ashley tells us. You have a lot of deadlines and timelines to adhere to. And again, exactly how you go about it will depend on your state’s laws. But generally speaking, a mechanic’s lien lets you sell a vehicle to recoup expenses the customer hasn’t paid.

You can’t just slap a lien on someone because they’re a day late, though. States will have their own requirements about how long a bill must go unpaid. You’ll also generally need paperwork proving that you were indeed hired to complete this work (document, document, document! Fullbay can help!). In some states, you need to inform the customer that you’re pursuing the lien several weeks in advance.

You also usually need to go to the DMV to get this lien. You may also need to deal with the county recorder’s office. Once you get the lien, you need to do some advertising and let the whole world know you’re selling the vehicle.

The above are just high-level steps, by the way. As always, we recommend talking to a lawyer to make sure you’re handling things correctly


All right. We’ve talked about how you can correct things when they go wrong. But can you prevent these issues from the get-go?

You might think we’re going to say Maybe, if you use Fullbay.

And you know what? You’d be partially right. We do want to emphasize that Fullbay can reduce trouble with non-paying customers.

However, we do have some general tips that any shop can put into practice, even without Fullbay:

  • Only accept checks from established customers with commercial trade accounts (i.e. no personal checks).
  • Document, document, document! Keep signed estimates and authorizations in case you do have a customer that doesn’t pay their bills.
  • Invoice quickly—and if possible, request payment upfront, before the vehicle leaves your lot. If customers pay before they leave, you don’t have to deal with any of this.

Okay. Now on to the good stuff!

If you’re using our Fullbay Connect integration, you can work with Interstate Billing Service. If your customer is approved to use IBS, then IBS pays your bill upfront (usually within a couple of days). The customer then pays IBS. You get paid, the vehicle gets fixed—everyone is happy.

And then there’s Fullbay Payments.

This feature is actually a series of integrations designed to make it easier and quicker for you to obtain payment—and minimize the chance of having to go to collections at all.

When you use Fullbay Payments, you can choose from the following:

  • Fleet Payments: A simple authorization process makes it easy to process fleet checks and fleet cards. The funds on checks and cards are verified during the payment process—again, you get paid upfront.
  • Credit cards and ACH: You know how credit cards work, but the Automated Clearing House allows bank to bank transfers. If the funds are there, you’ll be paid.

All of our commentators agreed that getting paid upfront is the best way to avoid collections and the associated unpleasantries. Fullbay Payments helps you get paid on time—often before a vehicle leaves your shop. And needless to say, it’s pretty incredible at tracking maintenance and, yes, documenting everything that goes on in case you do need it as evidence.

If you’re ready to see what else we can do, give our free demo a try! You’ve got nothing to lose but revenue.

Suz Baldwin