The Warranty Reserve: Warranty Work Is a Cost You Haven't Been Booking

The sample shop paid $15,060 in claims last year — 2.4% of revenue — arriving as ambushes: a $900 month here, a $2,100 month there. Booked properly, it's boring: 2.5% of every month's revenue accrues to a reserve, claims get paid from it, and the P&L shows the same smooth line either way. Boring is the whole design.

How it works

• The Claim History — claims by line of business against each line's revenue. The service line's 1.5% is your true workmanship rate; the products line's 4.5% is a supplier, spec or pricing problem wearing a warranty costume — the reserve absorbs claims, the comparison assigns them
• The Reserve Math — your trailing rate, the monthly accrual booked like rent, the six-month target, and a live verdict on today's balance: FUNDED, BUILDING, or UNDERFUNDED — one bad month from an ambush
• The Rules — pay claims FROM the reserve, visibly; every claim gets a cause; the twice-yearly by-line review with three fixes for a hungry line; the overflow rule (excess swept to profit is a bonus the shop earned by doing work that doesn't come back); and the written warranty, because unwritten ones cover everything forever

Built for

Trades · makers · auto shops · builders · anyone who stands behind their work and would like the standing to be budgeted.

What you get

One .xlsx file, four tabs, instant download. Excel, Google Sheets, Apple Numbers, LibreOffice. No macros, no subscription. Ask your CPA how to book the accrual for taxes.