CallSource^® Aim Higher

Check Your Calendar: Are You “Meeting” The Critical Dealer Tasks?

by Sherralyn Peterson , March 18 2010

Running a dealership is equivalent to running a dozen or so businesses, all at the same time. There's new vehicle sales, used vehicle sales, F&I, vehicle inventory, floor plan, service, parts, body shop, after-market accessories, DMS, Internet marketing, advertising, signage, bank/financial services, and many others, but don't forget the regular business components such as the employees, payroll, taxes, benefits, pensions, office supplies, office equipment, uniforms, service equipment, service supplies, essential tools, computers, building facilities, industry regulations, toxic waste disposal management, security, legal services, municipal ordinances, the list goes on and on. That being said, if dealers are not well organized and hands-on, things can very quickly get out of control.

Since dealers cannot monitor all areas regularly (to the level that they require) strong and reliable management and financial teams are essential. In order to be most effective, set the proper tone, and get self-assurance, however, there are things that dealers must do and check themselves on, on a regular basis. Here are a few suggested critical tasks that dealers must do:

Daily
• Open all dealership mail yourself, using a P.O. Box, if possible.
• Review daily operating controls, daily cash position, and expense controls.
• Sign all checks and void all corresponding invoices at the same time.
• Review all receivables over 30 days old; check ages and collection procedures; get action on delinquent accounts.
• Review progress on "daily nut" throughout the day.
• Walk through the dealership facility (including service, parts, used car lot, new vehicle storage areas).
• Set the example for customer satisfaction leadership via discussions with sales and service.

Weekly
• Verify hourly employees' time cards (looking for idle time, overtime, and tardiness).
• Review finance company charge-backs.
• Check to ensure payoffs to finance company on all units sold.
• Spot check all departments for proper securing of vehicle keys and titles, as well as files with customers personal information (R.O.'s, deal jackets, financial documents, etc.).
• Review process/records for properly reporting the IRS form 8300 ($10,000-plus cash transactions).

Monthly
• Review financial statements and operating report (compare operating guides to your own performances).
• Review schedules, outstanding receivables balances (should be aged for analysis), and require explanations.
• Check bank statements, balance reconcilements, and petty cash vouchers.
• Review expenses (i.e. phone bills, purchases) and any fixed assets acquired.
• Personally pass out paychecks to employees.
• Review volumes, grosses, and commissions for each sales consultant.
• Review all general journal entries and approve all write-offs.
• Check used vehicle inventory against used car schedule.
• Check titles against inventory schedule.

Periodically
• Review a sample of sales deal jackets for "shorts" accuracy and compliance.
• Personally meet or know all of your vendors; review check register for unfamiliar. payees and P.O. Box addresses and question any suspicious ones.

Once a year
• Have an outside company audit the business.
• Change all locks.
• Rebid supplier and vendor contracts and check/compare prices.

While some of these tasks may seem tedious or unnecessary, they can help improve your business, detect or prevent fraud, improve overall employee performance, and, maybe, can even save your business. It's the old saying, "inspect what you expect," that can make all the difference in your dealership.

Sherralyn Peterson is an automotive incentive specialist with 30 years of automotive experience helping dealerships maximize profits, minimize risk, and enhance cash flow. For more information, call 312-310-8380, email her at speterson@sherralynpeterson.com or visit www.sherralynpeterson.com.