MENU OF SERVICES

&

SAMPLE

FINANCIAL STATEMENTS

WWW.PAARMELIS.COM   |   INFO@PAARMELIS.COM 602 Center Street, Suite 101, Mt. Airy, MD 21771  (301) 829‐4646 

 WHY ARE WE DIFFERENT? 

WHO ARE WE?    

Paar Melis and Associates has been providing unparalleled tax and accounting services to the automotive repair industry since 1992. The business originally required our partners to drive around to local auto repair shops and collect their work. The driving to local shops has evolved into remotely working with over 460 auto repair shops all across the country. Since the automotive repair industry is our focus, we can provide industry specific insight that other accountants cannot provide. This allows us to help you really understand your financials so we can work together to improve your shop’s profitability.  HOW CAN AN ACCOUNTANT IN MARYLAND HELP ME? 

The increased integration of computers into both the sales and accounting sides of the automotive industry has brought the entire country only a matter of clicks away. We remotely access our client’s computer and communicate via email, phone calls, and even video chats. Financials are delivered via a secure online portal and are available for download at any time. Even though we are sometimes thousands of miles away, our clients say that we are even easier to reach than their old accountant down the street.   OTHER SERVICES WE OFFER:     

   

                 

 

MONTHLY ACCOUNTING SERVICES TAILORED FOR AUTOMOTIVE REPAIR 

MONTHLY ACCOUNTING SERVICES TAILORED FOR AUTOMOTIVE REPAIR 

INDIVIDUAL AND BUSINESS TAX PREPARATION 

 VALUATION SERVICES 

COST AND BREAK  EVEN ANALYSIS 

 BUSINESS EXIT PLANNING 

IRS AUDITS AND REPRESENTATION SERVICES 

 ESTATE AND TRUST TAXES 

  WHAT OUR CLIENTS ARE SAYING:  

“The staff at Paar Melis and Associates have taken my auto repair business to the next level. With their expertise and knowledge in the Auto Repair Business, I sincerely cannot thank Terry Delph enough for all that she does and the countless hours she dedicates to all of her clients. She is literally only a phone call away and knows that your business is everything. Thank you and a HUGE pat on the back to Terry for being more than exceptional!” – TRAVIS TROY, HONEST WRENCHES, Des Moines, IA 

 

"Thanks for the rapid response to our need for financials for a bank loan. A request like that to my old accountant would have resulted in chaos and dubious results."  ‐ FIRST LANDING AUTOCARE, Virginia Beach, VA  

"Absolutely the best! Professional, knowledgeable, friendly, willing to educate. Love working with them." ‐ SOUTHEAST AUTO SERVICE, Hinesville, GA  

“Reed Melis, Jason Paar and their team are an essential part of my team. I never have to wonder what my tax obligations will be, they are planned for.  I never have to worry about the changing laws and requirements, my team at PMA keeps me informed and together we change the plans as needed. The entire PMA team is large enough to have the resources to serve Cardinal Plaza Shell and my family expertly and professionally…I give PMA my highest recommendation.”   ‐ SCOTT BROWN, CARDINAL PLAZA SHELL, Springfield, VA  

 “Paar Melis not only understands our business, they provide value‐added analysis to us every month and every tax season.”  ‐ EUROPEAN AUTO REPAIR, Waltham, MA  

"Paar Melis made accounting understandable. I’ve gotten an education, not just an accountant. You definitely need an automotive‐specific accountant. The way everything keeps changing around in the industry and the way every state keeps changing the tax rules, especially Connecticut where we are. Paar Melis can do it all without issue. Their services are well worth every penny we are paying, honestly they’re worth much more than we are paying them!”  – BARRY BALABAN, BLACK BEAR AUTO, Bristol, CT  

"As an owner/operator of multiple auto repair establishments in the Denver Metro area, there isn't anyone I'd rather have handle our Accounting and Tax business. Jason, Reed, Gail, Hunt and so many others are integral to our operation. I can't think of a life without them!”                ‐ BRANDON PICKERING, PICKERING AUTOMOTIVE, Lakewood, CO  

 “We have been with Paar Melis for 15+ years and could not be happier! Experts in their field and experts in my industry! Perfect combination. Every person we have ever worked with has been absolutely incredible. They have figured out consistency in customer service, professionalism and exceeding our expectations!” – DENNY’S AUTO, Riverton, UT 

EMAIL: info@paarmelis.com PHONE: 301-829-4646

MENU OF SERVICES QUICKBOOKS TRAINING- We offer 1 on 1 training, either at our office or remotely over the web, in blocks of hours. These are best used in 1-2 hour segments in order to get the most out of the training experience.

Regular Price Monthly Client Price 3 Hour Block $ 430 $ 390 5 Hour Block $ 725 $ 640

TAILOR YOUR QUICKBOOKS FILE FOR MANAGEMENT INFORMATION- $ 399.00 One Time Fee (Discounted for Monthly Client)

-Edit your QuickBooks file and establish the correct Chart of Accounts and correct account classifications so your QuickBooks will produce useful reports. This will give you all the critical areas of management information to properly help you run your business with just a couple of mouse clicks.

ONE-TIME QUICKBOOKS FILE CLEAN-UP- Prices Vary Based on Time Required

-Correct and reclassify current year sales, cost of goods and payroll expenses for a useful profit and loss. -Set up a memorized daily sales journal that insures all future data will go to the proper accounts -Match your QuickBooks file to the prior year tax return -Balance sheet corrections as necessary

MONTHLY ACCOUNTING SERVICES- Prices Vary Based on Needs, Size and Complexity

-Monthly phone meeting at your request to review numbers -Mid-Year Tax Estimate Calculation to avoid tax “SURPRISES” -Monthly visit to your QB file to fix and correct your data and entries as necessary -Production of a Gross Profit Analysis -Monthly “Report Card” on your business -Monthly email with Report Card, P & L, GP Analysis and Balance Sheet -Answers to Quickbooks, tax, and general accounting questions are just a phone call away.

ONLINE PAYROLL SERVICES- Prices starting at $89/month

602 Center Street, Suite 101, Mt. Airy, MD 21771 (301) 829-4646 Fax (301) 576-3877

October 4, 2018

Reed's Auto Repair

Attn: Reed Melis

602 Center Street Suite 101

Mt. Airy, MD 21771

We have compiled the accompanying statement of assets, liabilities and equity – income tax

basis of Reed's Auto Repair, as of June 30, 2018 and the related statement of revenues andexpenses – income tax basis for the period then ended in accordance with Statements on Standards

for Accounting and Review Services issued by the American Institute of Certified Public

Accountants. The financial statements have been prepared on the accounting basis used by the

company for income tax purposes, which is a comprehensive basis of accounting other than

generally accepted accounting principles.

A compilation is limited to presenting, in the form of financial statements, information that

is the representation of management. We have not audited or reviewed the accompanying financial

statements, and, accordingly, do not express an opinion or any other form of assurance on them.

Management has elected to omit, substantially, all of the disclosures ordinarily included in

financial statements. If the omitted disclosures were included in the financial statements, they might

influence the user’s conclusions about Reed's Auto Repair's financial position and results of

operations. Accordingly, these financial statements are not designed for those who are not informed

about such matters.

PAAR, MELIS & ASSOCIATES, P.C.

Enclosure

HOW DOES YOUR SHOP COMPARE?

TARGETS

Averages of All

Shops

Number of Shops in Study: 385

Average Gross Sales per Month $25k Per Bay $87,132.03

Labor GP% 60% 57.38%

Parts GP% 48% 45.74%

Tire GP% 20% 26.03%

Service Advisor Cost as % of Sales <10% 8.52%

REED'S AUTO REPAIR

$99,264.40

69.36%

49.93%

10.25%

7.93%Service Advisor Cost as % of Sales <10% 8.52%

Average Repair Order YTD >$325 $442.09

Car Count-Monthly Average Depends 242

Advertising as % of Sales 3.00% 2.74%

Rent as % of Sales <9% 6.10%

$ to Owner as % of Sales 20% to 25% 15.69%

7.93%

$608.36

163

2.33%

5.26%

31.37%

Monthly Business Report CardReed's Auto Repair

June 2018

Month

Below

AverageAverage

Above

Average

Sales Missing for

Target GP%

Gross Sales X $21,586 Above YTD Avg

Labor Gross Profit X 16% Above 60% Target GP

Parts Gross Profit X3% Below 48% target GP

Missed sales $2,936

Other Gross Profits:

Tire Sales X 7% Above 25% Target GP

Sublet X 70% Above 15% Target GP

Shop Supplies X 4.23% of Sales - Goal 4%

Overall Gross Profit X 5.79% Above YTD Avg

Number of R/Os X 47 Above YTD Avg

Average R/O X $35.16 Below YTD Avg

Service Advisor Costs X 6.06% of Sales - Goal <7.5%

Operating Expenses X 29% of Sales - Goal <30%

Net Profit X $13,002 Above YTD Avg

� � � � � � Auto Repair

Gross Profit Analysis MonthOne Ended Jun 30, 2018

����������

une 3 ��� �8�

����������

June 30, 2017�

����������

����

June 30, 2018�

����������

����

June 30, 2017�

���������� ���������� ������� �������� ��������

��������� ���������� ��������� ������� ����������

������������������ ��������� ��������� �������� ����������

������������������� ���� � ������ ������ � ����

������!����"�#�$��%������ ��������� ��������� ����� ���������

���������� �������� �������� ����������� ��������

������������������ ��������� ���������� ��������� ��������

�������������������� &&���� � � �� &����� &�����

'%������ ������� ������� �������� ���������

��������� ������� ������� ��������� ��������

����������������� ������ ������� ������� ���������

������������������� ������ ������ � ���� ���� �

���������� ��������� ������ ������� �������

� �!������� ������ ������� ��������� ���������

������������ ������ "�������# ������� ������

�������������� ������ (���� � ����&� ��� �

���)���))�"����*%��$����� ������� �������� �������� ����������)���))�"����*%��$����� ������� �������� �������� �������

��*%���+��������� ������ ������� ������� ��������

���$�%��� &&!�������� ����� ������ ������ ��������

�'�&�� &&!(������������� ��������� �������� ������� �������

�'�&�� &&!(��������������� ������ ������ � ���� � ����

'�����,)�%�����)����� -���������� -����&���� -���������� -&��������&

)��!(�*�&�����'�&���!�� ������� �������� �������� ���������

'�����.����� ��/%��- -��������� -�������� -��&����� & -���� �����

)��!(�*�&�����'�&������� �������� ������� ������� ������

.����� ��/%�����/����) �&� �� ��� � ������ � ����

��*%0�1�*%��� ��������� �������� ��������� ����������

���$�%��+,$��������������������!�� ����� ����� ���� ����

)�(���&�- ����� ����� �������� �������

.�-�'!(������� -� ������ ������� �������� ������� ������ ������� ������� �������

'�����.����� ��/%��- -��� ����� -&�������� -������ �&� -����� ����

Jun 30, 18 Dec 31, 17 $ Change

ASSETSCurrent Assets

Checking/SavingsNFCU Savings 100,000.00 100,000.00 0.00Checking Account 268,278.20 163,263.72 105,014.48

Total Checking/Savings 368,278.20 263,263.72 105,014.48

Accounts ReceivableAccounts Receivable 3,999.44 6,764.20 -2,764.76

Total Accounts Receivable 3,999.44 6,764.20 -2,764.76

Other Current AssetsCash Clearing 4,439.81 837.49 3,602.32Credit Card Clearing 4,006.24 4,618.80 -612.56Inventory 750.00 750.00 0.00

Total Other Current Assets 9,196.05 6,206.29 2,989.76

Total Current Assets 381,473.69 276,234.21 105,239.48

Fixed AssetsComputer Equipment 577.44 577.44 0.00Furniture and Fixtures 11,840.93 11,840.93 0.00Leasehold Improvements 12,875.00 12,875.00 0.00Machinery and Equipment 63,401.27 63,401.27 0.00Vehicles 34,000.00 34,000.00 0.00zAccumulated Depreciation -111,425.02 -110,686.00 -739.02

Total Fixed Assets 11,269.62 12,008.64 -739.02

Other AssetsLease Deposit 5,200.00 5,200.00 0.00

Total Other Assets 5,200.00 5,200.00 0.00

TOTAL ASSETS 397,943.31 293,442.85 104,500.46

Reed's Auto RepairStatement of Assets, Liabilities & Equity - Income Tax Basis

As of June 30, 2018

Page 1

Jun 30, 18 Dec 31, 17 $ Change

LIABILITIES & EQUITYLiabilities

Current LiabilitiesAccounts Payable

Accounts Payable 27,185.07 20,786.54 6,398.53

Total Accounts Payable 27,185.07 20,786.54 6,398.53

Other Current LiabilitiesPayroll Liabilities 4,490.21 1,248.36 3,241.85Sales Tax Payable 3,004.16 1,878.70 1,125.46

Total Other Current Liabili... 7,494.37 3,127.06 4,367.31

Total Current Liabilities 34,679.44 23,913.60 10,765.84

Total Liabilities 34,679.44 23,913.60 10,765.84

EquityCapital Stock 1,000.00 1,000.00 0.00Shareholder Distributions -36,000.00 -111,166.00 75,166.00**Retained Earnings 268,529.25 233,919.48 34,609.77Net Income 129,734.62 145,775.77 -16,041.15

Total Equity 363,263.87 269,529.25 93,734.62

TOTAL LIABILITIES & EQUITY 397,943.31 293,442.85 104,500.46

Reed's Auto RepairStatement of Assets, Liabilities & Equity - Income Tax Basis

As of June 30, 2017

Page 2

Jun 18 Jan - Jun... % of I...

Ordinary Income/ExpenseIncome

64,346.16 323,139.96 54.9%44,452.74 229,982.32 37.9%

2,042.46 12,385.98 1.7%1,031.50 4,963.39 0.9%

576.47 2,736.09 0.5%44.00 472.00 0.0%

Labor Sales Parts Sales Tire SalesSublet Revenue HazMat Revenue Tire Disposal Fee Shop Supplies Revenue 4,759.25 21,906.64 4.1%

Total Income 117,252.58 595,586.38 100.0%

Cost of Goods SoldLabor (COGS) 15,378.36 98,917.64 13.1%Parts (COGS) 24,641.94 115,254.60 21.0%Tires (COGS) 1,390.28 11,116.52 1.2%Sublet (COGS) 152.00 3,030.76 0.1%Environmental (COGS) 0.00 40.00 0.0%Shop Supply (COGS) 571.22 2,238.82 0.5%Service Writer 7,106.83 47,207.58 6.1%

Total COGS 49,240.63 277,805.92 42.0%

Gross Profit 68,011.95 317,780.46 58.0%

ExpenseAdministrative Expenses 4,939.73 25,913.56 4.2%Advertising 2,563.69 13,856.82 2.2%Automotive 522.65 2,124.89 0.4%Bank & Credit Card Fees 2,001.97 10,398.64 1.7%Computer and Internet Expenses 388.15 918.14 0.3%Dues and Subscriptions 0.00 268.00 0.0%Information System 149.00 2,724.91 0.1%Insurance Expense 0.00 2,464.51 0.0%Licenses and Permits 0.00 776.10 0.0%Marketing 4,945.63 16,295.80 4.2%Meals and Entertainment 399.74 1,182.03 0.3%Office Supplies 256.33 1,453.11 0.2%Postage and Delivery 0.00 92.72 0.0%Professional Fees 418.00 4,973.00 0.4%Rent Expense 5,356.00 31,356.00 4.6%Shop Expense 0.00 1,524.45 0.0%Small Tools 0.00 1,289.47 0.0%Taxes 3,014.00 5,313.00 2.6%Telephone Expense 476.90 2,875.51 0.4%Training 0.00 837.68 0.0%Travel Expenses 537.88 853.08 0.5%Utilities 327.68 2,913.73 0.3%

Reed's Auto RepairStatment of Revenue & Expenses - Income Tax Basis

June 2018

Page 1

Jun 18 Jan - Jun... % of I...

Warranty/Refunds 373.42 560.40 0.3%Officer Payroll 7,886.18 51,092.68 6.7%

Total Expense 34,556.95 182,058.23 29.5%

Net Ordinary Income 33,455.00 135,722.23 28.5%

Other Income/ExpenseOther Income

Sales Tax Discount 22.80 126.95 0.0%

Total Other Income 22.80 126.95 0.0%

Other Expense862.59 5,175.54 0.7%100.00 200.00 0.1%123.17 739.02 0.1%

Training Charitable Contributions Depreciation Expense Non Financials 0.00 0.00 0.0%

Total Other Expense 1,085.76 6,114.56 0.9%

Net Other Income -1,062.96 -5,987.61 -0.9%

Net Income 32,392.04 129,734.62 27.6%

Reed's Auto RepairStatment of Revenue & Expenses - Income Tax Basis

June 2018

Page 2

Jan - Jun 18 Jan - Jun 17 $ Change

Ordinary Income/ExpenseIncome

323,139.96 245,597.69 77,542.27229,982.32 190,990.91 38,991.41

12,385.98 16,800.94 -4,414.964,963.39 3,262.50 1,700.892,736.09 2,567.05 169.04

472.00 0.00 472.00

Labor Sales Parts Sales Tire SalesSublet Revenue HazMat Revenue Tire Disposal Fee Shop Supplies Revenue 21,906.64 18,939.25 2,967.39

Total Income 595,586.38 478,158.34 117,428.04

Cost of Goods SoldLabor (COGS) 98,917.64 73,014.61 25,903.03Parts (COGS) 115,254.60 96,753.90 18,500.70Tires (COGS) 11,116.52 12,213.76 -1,097.24Sublet (COGS) 3,030.76 3,083.00 -52.24Environmental (COGS) 40.00 0.00 40.00Shop Supply (COGS) 2,238.82 2,080.40 158.42Service Writer 47,207.58 37,808.85 9,398.73

Total COGS 277,805.92 224,954.52 52,851.40

Gross Profit 317,780.46 253,203.82 64,576.64

ExpenseAdministrative Expenses 25,913.56 0.00 25,913.56Advertising 13,856.82 7,699.71 6,157.11Automotive 2,124.89 5,082.65 -2,957.76Bad Debt 0.00 -185.30 185.30Bank & Credit Card Fees 10,398.64 9,215.83 1,182.81Business Licenses and Permits 0.00 459.00 -459.00Computer and Internet Expenses 918.14 0.00 918.14Dues and Subscriptions 268.00 5,237.00 -4,969.00Information System 2,724.91 2,299.54 425.37Insurance 0.00 2,530.60 -2,530.60Insurance Expense 2,464.51 0.00 2,464.51Licenses and Permits 776.10 536.95 239.15Marketing 16,295.80 11,982.05 4,313.75Meals and Entertainment 1,182.03 1,142.03 40.00Office Supplies 1,453.11 3,033.59 -1,580.48Postage and Delivery 92.72 105.41 -12.69Printing and Reproduction 0.00 240.12 -240.12Professional Fees 4,973.00 4,103.94 869.06Rent 0.00 19,600.00 -19,600.00Rent Expense 31,356.00 0.00 31,356.00Repairs and Maintenance 0.00 9,966.38 -9,966.38

Reed's Auto RepairProfit & Loss Prev Year Comparison

January through June 2018

Page 1

Jan - Jun 18 Jan - Jun 17 $ Change

Shop Expense 1,524.45 0.00 1,524.45Small Tools 1,289.47 0.00 1,289.47Small Tools and Equipment 0.00 6,300.58 -6,300.58Taxes 5,313.00 1,854.00 3,459.00Telephone Expense 2,875.51 2,105.09 770.42Training 837.68 0.00 837.68Travel Expenses 853.08 382.43 470.65Utilities 2,913.73 3,588.27 -674.54Warranty/Refunds 560.40 80.00 480.40Officer Payroll 51,092.68 50,512.66 580.02

Total Expense 182,058.23 147,872.53 34,185.70

Net Ordinary Income 135,722,23 105,331.29 30,390.94

Other Income/ExpenseOther Income

Accrual To Cash Basis 0.00 6,215.00 -6,215.00Sales Tax Discount 126.95 105.86 21.09

Total Other Income 126.95 6,320.86 -6,193.91

Other Expense5,175.54 5,175.54 0.00

200.00 0.00 200.00739.02 1,083.00 -343.98

Training Charitable Contributions Depreciation Expense Non Financials 0.00 0.00 0.00

Total Other Expense 6,114.56 6,258.54 -143.98

Net Other Income -5,987.61 62.32 -6,049.93

Net Income 129,734.62 105,393.61 24,341.01

Reed's Auto RepairProfit & Loss Prev Year Comparison

January through June 2018

Page 2