An automotive shop sells parts and labour, and they behave nothing alike. Books that blend them cannot tell you which one is carrying the business.
Revenue
Labour revenue — the work itself. Parts revenue — what is fitted. Sublet revenue — work sent out and rebilled. Add-on service revenue — fluids, filters, alignment, sold at the point of service.
Labour and parts must be separate. Labour margin is a function of how you price hours and how efficiently they are used; parts margin is a function of buying and markup. One number covering both tells you nothing you can act on.
Cost of sales
Parts cost, against parts revenue, which produces product margin.
Technician wages, against labour revenue.
Sublet cost, against sublet revenue — usually a thin margin and worth watching that it is not negative.
Shop supplies consumed across jobs.
Inventory is a real balance here
Unlike most service trades, a shop carries meaningful stock. That makes inventory turns and dead stock genuinely useful rather than marginal — cash sitting on a shelf in slow-moving parts is common and rarely examined.
Overhead
Premises, equipment and lifts, diagnostic software and subscriptions, insurance including garage keepers cover, marketing, admin and service advisor wages.
Garage keepers insurance covers customer vehicles in your care and is specific to this trade — general liability does not cover a customer's car being damaged on your lot.
What this setup gives you
Labour margin and parts margin separately, technician efficiency, and a view of the stock the business is holding — see technician utilisation.