Towing Business Owners: What Did Paperwork Cost You Last Month?

🔎In this article: Towing industry veteran Dennis McGowan explores the hidden expense of manual administrative work, from entering the same information multiple times and chasing down missing invoices to processing lien paperwork and reconciling payments. Using a model eight-truck towing operation, he breaks down the hours consumed by paperwork each week, helping to illustrate why these costs often go unnoticed.

Ask a shop owner what diesel cost them last month and they’ll give you a number (accurate to within a couple hundred bucks) without looking it up. Ask about insurance and you’ll get the number, plus a bonus ten-minute conversation about what the carrier did to them at renewal. Those costs show up with a bill attached, so everybody knows them cold.

But ask a shop owner what paperwork cost them and you’ll likely get a laugh and response something like, “a lot, probably.”

The cost of paperwork is hard to quantify. It doesn’t show up on a bill at the end of the month. Instead, it’s a sneakily expensive bill towing business owners pay a few minutes at a time. For example:

• Your dispatcher keys in a job the motor club already sent over, then re-enters half those same details again when it’s time to invoice.  
• A ticket rides around in a door pocket for a week and never gets billed.  
• A vehicle sits in the back row of your impound lot longer than it should because the lien paperwork went out late.  
• Somebody spends Friday afternoon matching card payments to tickets with a highlighter.

None of those (and hundreds of other scenarios like them) are big enough on their own to make anybody ask if there’s a better way. And because manual effort paperwork is spread across the whole office and the throughout the entire week, it never piles up in one spot where you could point at it.

Calculating the Cost of Towing Business Paperwork

I’ve spent more than twenty years on the operations side of the towing and recovery business. When I signed up to be an Academy speaker in Baltimore at the American Towman Exposition this year, I decided to focus on finding out and sharing a real, accurate estimate of what paperwork is likely costing operators and owners.  

To prepare for this presentation:

• ‍I built a model shop: eight trucks, around a thousand calls a month, a lot with about 75 cars on it, and four or five cars a month that go the lien route.  
• ‍I walked that shop through a typical week: putting a price on every hour somebody spent on paperwork and documenting every dollar lost because of it.

What this Exercise Revealed

The paperwork hours I added up using this model shop landed between 23 and 29 per week. That’s most of a full-time job, and like hiring someone whose entire role is shuffling information from one spot to another (and a lot of repetition).  

I’ve never met anyone in a tow shop with that role. Instead, the paperwork gets split between the dispatcher, owner, owner’s spouse at the kitchen table on Sunday night, and whoever happens to be sitting closest to the printer.

The dollar total came out greater than I expected. I’ll share it during my presentation in Baltimore, along with how that expense stacks up against what towing management software that offloads paperwork tasks typically costs. I’m looking forward to inviting open discussions with those in the room about accuracy, outlying scenarios, other considerations, etc.  

If you’ll be in Baltimore, I hope you’ll join me for that discussion. If not, contact me after the show and I’d be happy to share that number and a chat with you, too.

Attending the American Towing Exposition? Join the Session and Bring...

A number of your own. Here’s how to calculate it:

Step 1 : Pick a normal workday. On a sheet of paper posted next to your dispatch desk, make a tick mark every time someone types data that already exists somewhere else, such as:

• A job that came through a motor club portal and gets keyed into your system
• A plate number read off a photo
• An address a customer gave you over the phone
• A card payment that must be matched back to its ticket

Step 2: Write down your guess about what that tick-mark number will be before the day starts. Don’t tell anybody what you’re doing. It may alter the team’s natural behavior.  

Step 3: At the end of the day, count the marks and see how close you were. If the count is lower than your guess, tell me and the audience how you run your office. If it’s higher, bring the sheet with you and let’s workshop!

American Towman Exposition Academy Session Details

From Paperwork to Profit is a Carte Blanche Passport Seminar scheduled for Saturday, November 21, at 8 a.m. Breakfast is included (which is about the only way I know to get tow operators into a room at 8 a.m. on a Saturday).  

It runs about 50 minutes, and I’ll stick around for questions. Bring your tally sheet and check my math against your own numbers. If you can’t make the session, come find me in the expo hall. I’ll be at Autura’s booth #1115 or walking the floor.