A fraud tale: Misdirection of parts
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One type of fraud a shop can fall victim to is a misdirection of sales part. A red flag for any shop would be a discrepancy between what the shop thinks it’s making on parts and what is actually being realized.
Hunt Demarest, a senior accountant who specializes in working with automotive repair shops with Paar, Melis & Associates, had a client suffer through this kind of scheme.
The client’s books were a mess. In the process of cleaning it up, parts margin data was compared to the shop management software. In Demarest’s eyes, so long…
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