How To Accept Payments For A Body Shop

A body shop gets paid by two customers for the same repair: the vehicle owner and, usually, their insurer. Those two pay on entirely different timetables, and a shop that does not manage the gap finances repairs with its own parts account. Here is the payment setup, from estimate through supplement to release.

Last updated: July 28, 2026. All figures sourced below.

How body shop money actually arrives

Four flows. Insurance-paid repairs: the insurer settles most of the bill on their schedule, often after supplements are approved. Deductibles: the owner's portion, collected at release. Customer-pay repairs: uninsured work, small damage, and cosmetic jobs paid entirely by the owner. And supplements: additional damage discovered during teardown, which must be approved before it is billed and is where timing pressure concentrates. Parts costs are incurred long before either payer settles.

By the numbers (July 28, 2026)

This money arrives at 2.6% + 15¢ in person under Square's 2026 pricing. On a $750 insurance deductible at release that is $19.65. Taken at the counter before the keys change hands, which is the single habit that keeps deductibles from becoming receivables.

Collect the deductible at release, without exception

The deductible is the shop's most reliably lost money. The car is finished, the customer is delighted, and the temptation to release it and invoice the difference is strong. Do not. Payment at release, before the keys change hands, is standard practice in the trade and customers expect it when it is stated at drop-off rather than introduced at collection. State it on the repair authorisation, restate it in the completion call, and take payment by card or link at the counter. A car released against a promise is a receivable with wheels.

Supplements and the approval discipline

Teardown reveals damage the estimate missed, which is normal, and billing it without approval is how a shop ends up eating the difference. Document the additional damage with photographs, submit the supplement, and get written approval before the work proceeds. Where the owner is paying, the same rule applies with a written quote and a signed acceptance. The discipline is unglamorous and it is the difference between a shop that recovers its true cost and one that quietly absorbs a few hundred dollars on most jobs.

Customer-pay work, where the shop controls everything

Uninsured and cosmetic repairs are the lane with the best cash flow and the most price sensitivity, since the customer is spending their own money and comparing quotes. Quote in writing with the scope explicit, take a deposit covering parts before ordering, and collect the balance at release. Offer card for convenience, and where a customer needs to spread a larger repair, use a documented arrangement or a third-party financing option on its own terms rather than an informal promise, because informal arrangements in this trade rarely end well.

Parts float, rails, and fleet accounts

Parts are ordered and paid for before either payer settles, which is the structural cash flow problem in collision work. Manage it with deposits on customer-pay jobs, prompt supplement submission, and disciplined follow-up on insurer payments rather than by extending your own parts account. Card suits deductibles and smaller customer-pay repairs; larger customer-pay jobs and fleet accounts belong on bank transfer where the fee difference is real. Fleet and dealer work bills monthly on terms and should be enforced from the first invoice.

Sources

• Swipesum — Square Fees Explained 2026 (verified against Square's published pricing)
• NerdWallet — Square Fees: Calculator and Pricing for 2026

What people ask me

When should a body shop collect the deductible?

At release, before the keys change hands. State it on the repair authorisation and restate it in the completion call, since a car released against a promise is a receivable with wheels.

How should supplements be handled?

Photograph the additional damage, submit the supplement, and get written approval before the work proceeds, since billing without approval is how shops absorb the difference.

What is different about customer-pay work?

Better cash flow and more price sensitivity. Quote in writing, take a deposit covering parts before ordering, and collect the balance at release.

How should the parts float be managed?

With deposits on customer-pay jobs, prompt supplement submission, and disciplined follow-up on insurer payments, rather than by extending your own parts account.

Which rail suits which payment?

Card for deductibles and smaller customer-pay repairs; bank transfer for larger jobs and fleet accounts, where the fee difference is material.

Heads up: some links here are affiliate links. If you buy through one, I may earn a small commission. It costs you nothing extra. I only recommend tools I use myself.