Move cars off the lot faster than you can drive them
Feel like your automotive accounting processes have become a total mess? It may be time to streamline things with a centralized accounting office.
You’ve worked so hard to get where you are now. There have been sleepless nights, 7-day work weeks, and many growing pains. But today? Today you can proudly say that you’re running a successful multi-store auto dealership.
Expanding your dealership’s reach has been an overall positive experience that’s created jobs in your area and increased your profits year-over-year. However, with more and more stores opening, you may be running into a few new roadblocks that need addressing. One of the biggest hurdles for growing multi-store dealerships is the management of automotive accounting.
It’s not uncommon for dealerships with multiple storefronts — and this applies to both traditional and BHPH dealerships as well — to rethink the way they handle their accounting. Having a separate accounting office for each and every dealership can become more and more confusing, creating redundancies, and wasting your time and money.
How your dealership may benefit from centralized automotive accounting
Centralized automotive accounting, in its most basic form, brings all of your accounting staff together in one location rather than spread out in your individual stores. Although the bulk of the team works together in the one accounting office, some dealerships will keep one accounting support person at each store to always have someone on the front lines.
Why would a multi-store dealership want to consolidate its accounting team? There are a few big reasons:
Improved consistency, efficiency, and accuracy
Managing money is no joke, and it requires air-tight processes to keep things running smoothly. Centralized automotive accounting gets everyone on the same page, rather than having 20 different ways of doing things in each store. When problems arise, they can get handled quickly and efficiently.
Better relationships with vendors and partners
There are probably certain vendors or partners that your dealership works with all the time, but with a decentralized accounting system, they’re getting multiple invoices and calls from a variety of different employees. Imagine if they could get one monthly invoice that has specific charges from each store? And if they need to get in touch with you, they know exactly who to call every time (rather than calling a handful of your other dealerships looking for the right person).
More direct control over reporting and compliance
Accurate reporting is essential to understanding how your dealership is doing, and full compliance is critical to keeping your doors open. Centralized accounting reduces the risk of mistakes by taking reporting and compliance out of many hands, and putting them into just a few.
For many multi-store dealerships considering centralized automotive accounting, the ability to save money is a major selling point. You may be able to eliminate several redundancies, especially in staff. Instituting various technologies can cut down on invoicing, mailing, payroll, electronic transfers, and bill pay costs.
Another future benefit to keep in mind is that if you ever decide to sell your dealership, those strong, centralized internal controls are often quite appealing to buyers.
Are there drawbacks to centralized automotive accounting?
In general, centralized accounting tends to be a positive move for multi-store dealerships. The disadvantage, however, is that there’s no one-size-fits-all solution. What worked for one group of stores may not work for another. Making the transition to centralized accounting requires thorough research, planning, and implementation. It’s not the type of thing you’re going to accomplish overnight, and it may take a while to build and tweak to perfection, but hopefully you’ll find the effort is worth it.
Moving to centralized accounting can also be hard when you’re trying to establish which positions are necessary and what the hierarchy will be. You will likely find that you no longer need certain employees, and it can be difficult to let those people go in the name of improving the way you run your business. Once you’ve chosen your core accounting group, you’ll also need to have a training program in place to ensure everyone is on the same page and understands how you expect the department to run. There will undoubtedly be growing pains, but if you take time to do the research and planning, and lay a strong foundation, the better off everyone will be.
One important fact to consider? Your dealership may not need to move to centralized automotive accounting right now. If your business is already a tightly-run ship and has firm, standardized dealership-wide processes and policies in place, you could be doing just fine. Or, you may feel that certain aspects of your accounting are better kept separated, while others could benefit from being centralized. Centralizing some functions, while keeping others in-house, is an entirely logical choice for some dealerships.