Category: Trends & Insights

Master Your Upcoming DMS Transition

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Learn the 4 Steps Dealers Need to Know Before You Roll Out a New Dealer Management System

 

Your dealership relies on technology to drive innovation and meet changing buyer expectations. Finding a right-sized Dealer Management System (DMS) is a big step. But, the transition to your new DMS is a big step on its own. Now that you’ve made the decision to move to your new DMS, make sure you’re ready to launch and hit the ground running with your brand new technology by following these four steps from our Performance Management team.

There’s More to a DMS Transition than New Technology…

Dealertrack DMS Performance Manager Michael Panozzo began his career in retail automotive twenty years ago. He’s experienced the ups and downs of a DMS transition from various roles in the dealership and tells his dealership partners, “Yes, you’re changing technologies, but it’s about more than that.” There are countless fears that hold business leaders back from adopting a new DMS. Eventually, though, when it’s time to switch to a DMS that fits your goals, your budget, and your dealership’s needs, taking the next step can be done well if you follow a few best-practices.

Step One: Be Prepared for Change

It sounds simple, but according to Panozzo, it’s the little things your team wasn’t expecting that become a big deal later. “Understand how the DMS and other departmental tools are used and integrate together, then develop a plan for adoption,” Panozzo explains. “A DMS change is a change to how people do their everyday tasks. Staying prepared and ahead of this is essential!” Being mentally ready for change can help everyone succeed.

Step Two: Operational Efficiency Starts with People

So, you’ve decided to change your DMS. You’re pretty excited and looking forward to the new functionality of the new system that touches every corner of your dealership. But, keep in mind, “you’re changing your technology, but it’s about a whole lot more than that,” Panozzo states. You can’t roll out a shiny new system and expect everyone to embrace it simply because it works better, or because it’s easier to learn. Your organization runs well because of deep-rooted operational efficiencies that rely on people. Make sure you include them in the transition at every step. And, speaking of including your people…

Step Three: Communicate Again and Again

According to Panozzo, Dealer Principals and Managers cannot over-communicate when it comes to preparing the dealership for a new DMS. If you’ve just signed on for a transition, you likely have time to prepare the team. “Don’t waste it! Communicate often and encourage good performance. Find out what motivates your team and go from there.”

Step Four: Master the Mindset

In his experience, Panozzo knows that to be truly successful with your upcoming DMS implementation, your dealership’s leaders must learn to master a bit of psychology. “Something like seventy-five percent of learning a new DMS is all psychology,” he states. “It’s a total mindset shift.” Helping your team adapt to change begins there, so “begin early and help shift the way your team operates before launch, not after.”

Dealertrack DMS has mastered the art of installing your new technology at the dealership. Our team is with you every step of the way to ensure a successful launch. Prepare your dealership staff for change with steps in our guide, The Road to Consensus.

Leverage DMS Technology for Improved Human Resources

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Technology and retail automotive are anything but static. In the first half of 2020, dealerships are facing constant changes and challenges thrown at them from nearly every angle. As Director of Business Development for Dealertrack DMS, it’s my role to find, vet, and craft strategic partnerships, solutions, and DMS integrations that offer a best-in-class experience to help our dealers succeed. The DMS is so critical to dealership success, specifically from a human resources perspective, managing payroll, and recruiting, that having a seamless experience that improves your business is key. Now, as businesses begin to reopen and people are returning to work, I believe we have the opportunity to make rapid progress in the midst of unprecedented disruption and changing consumer behavior.

Hiring for your Team

According to a 2019 Dealership Staffing Study, staffing is one of the biggest issues for dealerships. On top of that, only 39% of employees feel their dealership is using the latest technology to help them succeed in their job. As business begins to return to normal, dealers will face a backlog of service appointments and limited staff due to unfortunate reductions and furloughs. Some departments may even struggle to fill roles for employees who earned more money on unemployment. Doing more with less may be the norm right now—but it isn’t sustainable. Our solution, at Dealertrack DMS, is to partner with the experts at Hireology and Netchex. In 2020, we’re rolling out a new integrated Payroll solution that automatically transfers new hire data, manages PTO, performance review, and saves time by managing the complexities of tech-time, among other features. The best part of this strategic partnership is that all of these integrations occur through your DMS.

Demand for Technology Straining Resources for Dealers

Digital retailing, digital transformation, data-driven…all of these concepts that are revolutionizing the dealership are real and here to stay. But, having a high-powered DMS and complex systems that keep your business moving forward (at record pace) require a network that can keep up. We saw it first-hand when businesses were forced to shut down at the beginning of March and April this year. Dealers who had IT support and state-of-the-art networks were in a good position to send employees home and set up their remote offices. Offering consumers new ways to shop online and access virtual showrooms is a groundbreaking concept and it’s not going away anytime soon. With all of these new technology solutions, your dealership absolutely requires the digital infrastructure to support it. Managed Network Services, powered by Proton IT, provides a critical, and dealer-specific, solution to keep dealers running.

Dealerships are built on human-to-human connection. The “hand shake” at the end of the sale, the relationship and trust earned for a major decision. It’s the same for team members who build their careers in the dealership. Now that we’ve adjusted to a more virtual environment, our offerings are simply faster, more seamless, and online. Yet, we are human at the core. Improving the way we hire, recruit, and employ our teams in this new environment will help. And, our team will continue to provide best-in-class solutions that drive your business forward.

About the Author

Tyler Anderson | Director of Business Development, Dealertrack DMS

 

Tyler Anderson joined Dealertrack DMS in June of 2019 bringing with him 24 years of experience in the automotive industry. In his role, Tyler has developed partner-driven products that allow our team of professional experts to provide a best-in-class suite of integrated solutions. Through open source software and strategic partnerships, Tyler has up-leveled Dealertrack’s core products allowing for seamless integration into hundreds of market options. He has personally driven new payroll solutions, managed network services and parts processing partnerships in this year, alone, helping dealers navigate the digital transformation taking place amidst social distancing restrictions across the country.

Process & Efficiency: The Key to Profit & Success

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At the start of 2020, my team of Performance Managers had big goals and aspirations to bring our dealer partners up-to-speed on some of the new and exciting developments that would enhance Dealertrack’s Dealer Management System (DMS) and bring much needed process improvements to our partners. And then, it seems, the worst happened. Dealers were suddenly thrust into a series of rapid transformations and were in a rush to set up remote access for staff, launch their safety protocols, and get their virtual sales up and running. All of that was extremely important, but, as we’ve all seen, dealers couldn’t afford to ignore their basic, everyday operational processes. Rather, in the midst of these rapid transformations, dealers had to find a way to manage operational processes in order to succeed. Reporting didn’t just go away—it became paramount!

Now, with almost half of the year behind us, it’s clear that the key to profitability relies on improved process.

Trusted Partners Help You Roll Out New Technologies

The right technology within your dealership is important. A DMS that aligns to your goals can help you succeed whether things are going right or you’re suddenly forced to reinvent the way you interact with buyers. But, there’s a difference between surviving and thriving in business. Traditionally—and this was the case in my early career—launching a new technology at your dealership was generally the last interaction you would have with your vendor or account manager. Any upgrades or updates that came along after that fact could be missed along the way, too. So, it was easy to get frustrated with your investment. Working one-on-one with a Performance Manager, dealers no longer have to launch their DMS technology and figure it out from there. We have a team of experts who know the in’s and out’s of the system and who can help your team how to understand it.

Consistent Management, Monitoring, and Goal-setting Leads to Improvements

As I said before, getting the most from your technology tools makes a huge difference in the performance measured from your investment. Every dealership has unique needs, so simply handing over a complicated, one-size-fits-all system would be a disaster. With Performance Management, dealerships can fine-tune custom reporting so that you get the data and details you need. This year, Dealertrack DMS began rolling out new integrated solutions for our Payroll and Reporting features. With direct feedback from my Performance Managers, we were able to build customizable features that are generating a lot of excitement in the DMS world. By building consistent measuring, monitoring progress, and establishing goals for our partners, we’re able to help dealers reach—then exceed—their goals. A good day for the Performance Management team is when our dealers are successful.

Faster Funding, Streamlined Fixed Operations, and More

Dealers now have the ability to use data-driven practices, without needing to rely on gut-instinct alone, to hit their targeted goals each month. With so much at stake, particularly recently, having access to faster funding and streamlining your operations can seriously impact your odds of success. Dealertrack DMS recently launched Critical Analytics which aims to improve Sales to Accounting (solving the age-old “desk vs. accounting” problem), improve Business Office Summary, and help you get fund cash faster! There are more features, too, but you would need to spend some time with your Performance Manager to see all the customizable features unique to your dealership.

Technology advances at a rapid pace and dealerships who can keep up will have an advantage. Yet, having a trusted and valued partner to roll out the right changes, bring your dealership up-to-speed on custom features, and build unique processes that align to your goals will truly be the key differentiator that sets your business apart for the remainder of 2020—and beyond.

About the author:

Randy Wilson | Director of Performance Management, Dealertrack DMS

With over thirty years of experience in the retail automotive industry, Randy Wilson brings exceptional wisdom to his role as Director of Performance Management to the Dealertrack DMS team. By leading a team of Performance Managers who have all previously held high-level dealership responsibilities in their careers, he is committed to driving rapid transformation and building measurable growth for our partners. Randy joined Cox Automotive in 2012 and works tirelessly to bring real-world experience into the development of technologies that enhance the day-to-day performance and efficiencies of every aspect of the business. In his spare time, he can be found sporting his Cheesehead gear and spending any spare moment boating and fishing on the ocean. He and his wife have four children together and five grandkids.

 

Hiring for your Digital-forward Dealership

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A version of this article originally appeared on Hireology here.

BY BETH KEMPTON | HIREOLOGY

Following widespread closures as a result of COVID-19 stay-at-home orders, dealerships across the country are gradually reopening as states ease social distancing mandates. While many service centers—deemed essential businesses—remained functioning over the past eight to twelve weeks, due to a lack of foot traffic, public concern about the economy, and a growing uncertainty of the pandemic’s impact, many dealerships were still forced to make unfortunate cuts to their staff.

As your dealership gets back up and running, your employees are your top differentiator and will help you drive customer service and profit long-term. And in today’s digital-first world – with consumers completing most of their car buying research online – your employees are the only thing standing in between customers and a final purchase. If your customers have a poor experience with your employees, they won’t hesitate to buy their next vehicle elsewhere.

Below, we’ve outlined some dealership hiring steps you can take to staff for success, whether you’re looking to bring back former employees or need to attract a new pool of talent to drive results at your dealership.

Win Back Your Top Former Employees

One option for dealership hiring to support reopening plans is tapping into former employees, especially any top performers you had on staff before the pandemic. But bringing back previous employees isn’t as simple as reaching out and saying their jobs are available again.

Some employees hesitate to return to your dealership due to concerns about facing layoffs in the future, or because they’ve mentally moved on and want to start fresh in a new role. For others, they might have already found a new role at another organization in the meantime.

As an added challenge for dealerships and other businesses across industries, many employees who were laid off as a result of the pandemic stand to earn more money on unemployment for the time being than they do when fully employed. While the $600 a week unemployment bonus won’t be in place indefinitely, you still need to put in extra effort to win back former employees and remind them of the benefits and opportunities of working for your dealership.

When reaching out to past employees with your dealership hiring plans, reiterate the benefits your dealership offers – such as vacation time, retirement benefits, professional development reimbursement, community involvement, career paths and more. Also remind these employees that returning to your dealership will enable them to jump right back into work, rather than started over entirely at a new organization.

In addition to your dealership’s benefits, be transparent with employees you’d like to bring back about any changes your dealership is making to adapt to the new normal as a result of the COVID-19. Highlight any safety, training and sanitation measures you’ll have in place to keep both employees and customers safe and healthy.

Also consider rethinking your commitment to work-life balance given these unusual circumstances, and communicate any updates to employees you’re hoping to bring back. Given the impact of the pandemic, many people who are eager to get back to work also have family commitments – such as caring for children who are out of school or checking in on older relatives – so they will be looking for job opportunities with employers who are empathetic to these personal priorities.

As you get in touch with past employees, let them know of any ways in which their day-to-day roles might change, beyond standard safety and sanitation procedures. For example, as dealerships shift toward digital retailing to meet consumer demands, your sales roles might become more consultative, rather than focused on negotiation. And in some cases, customers will expect more personalized service than ever before, such as having a car delivered to their homes for test driving. If your past employees aren’t qualified or willing to adapt to these changes moving forward, they might not be the right fit for your dealership’s future success.

Rethink the Roles You Need to Succeed

While some of your dealership’s prior employees might have the skills and motivation needed to adapt to the fast evolving world of automotive digital retailing, not all of them will be a fit for your team in the long run. For example, some of your all star sales consultants might have been great negotiators but don’t have what it takes to focus more on the customer experience than negotiation as more dealerships have set pricing.

While you can’t bring back all your former employees – either because they choose not to return or because they’re no longer a fit for your dealership – you can shift your dealership hiring strategy to attract a new set of talent. With millions of new job seekers now in the market, now is your dealership’s chance to attract motivated candidates from outside the retail automotive industry.

In your job descriptions and on your career site, make sure not to limit your potential talent pool to job seekers who have direct dealership experience. If you’re looking to fill a sales role, instead of requiring 3-5 years of dealership sales experience, for example, seek out prospective applicants who are motivated by driving results and customer service-oriented.

Given the shift to digital retailing, your dealership has the opportunity to reach job seekers who might not have previously been interested in working for a dealership. While many job seekers were wary of working for a dealership in the past, due to the risk and uncertainty of high-commision sales roles, digital retailing enables many dealership sales staff to have more reliable income.

Take AutoNation, the largest new vehicle retailer in the U.S., for example. The dealership group offers its sales team a base salary plus bonus plan and offers customers simple, straightforward pricing, so dealership sales staff can focus more on providing an exceptional customer experience rather than high pressure sales tactics.

The focus on digital retailing means your dealership can now attract job seekers who might have been looking for sales roles in other industries – such as with major technology companies.

To ensure your dealership hiring efforts attract the right employees who will drive success through digital retailing, make sure to rethink your hiring process as well. Evolve your interview questions to cover more about the customer experience than traditional sales responsibilities. Also update your employee skills tests to ensure you’re targeting the right skills for the shift to digital car sales.

While digital retailing already saw significant growth in recent years prior to COVID-19, the pandemic led to a significant shift in the retail automotive industry and the sales process will likely never be the same. By focusing on bringing back former employees and attracting a new set of talent who can meet the needs of digital retailing, your dealership will be set up for long-term success. For additional tips on effectively attracting qualified talent at your dealership, read our Career Site Playbook.

A version of this article originally appeared on Hireology here.

Reimagine Your Dealership Staff

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Dealerships across the country are beginning to reopen and emerge from shelter-at-home guidelines this June. And eager employees are looking to fill old positions in sales and service roles that may have been placed on furlough or operated in remote capacity. But, the return to the showroom won’t be as simple as flipping on the “Open” sign for most businesses. With safety regulations and guidelines, as well as altered customer expectations, dealerships are being very careful not to rush into the process. Many car buyers aren’t as eager to jump back into old habits either. With virtual showrooms and online buying becoming standard due to the lessons learned during quarantine, not everyone wants the process of buying a car to go back to pre-COVID-19 ways. Dealertrack DMS VP of Operations, Mandi Fang, recently joined Dale Pollak, founder and EVP of vAuto, to discuss the principles for becoming a data-driven dealership in his online webinar series. Let’s take a look at these steps and apply them to the dealership re-boarding process to build a data-driven team ready and willing to meet the needs of the new business environment.

Build a Culture that Values Data

Using data-driven practices to effectively measure and monitor what matters most to your business will help you minimize your reliance on instinct. This may sound simple in theory, but in reality, nearly 40% of organizations use ‘gut feelings’ to make big decisions.¹ Building a culture that understands and values data has to start at the top. Once you demonstrate that dat
A can positively impact your dealership, you’ll have an easier time convincing your team to trust it over experience or gut instincts. Look to your DMS to provide accurate forecasting and reporting. And leverage your Performance Managers to help you establish which reports will help you.

Redefine Your Business Objectives for Today’s Values

As buying habits change, the market shifts, and situations such as a global pandemic impact the way customers interact with your business, your dealership must remain flexible. Redefining your business objectives for today’s values will keep you on track to meet realistic goals. For example, according to a Cox Automotive customer sentiment survey, two out of three buyers are willing to buy a vehicle 100% online.² Do your business objectives truly accommodate what two out three buyers want? That includes virtual test drives, e-forms, online financing, virtual showrooms, video meet-and-greets, etc. Is your staff trained to handle these new needs?

Find the right People, Processes, and Tools

Aligning the right people to your technology—and implementing efficient processes—is the magic formula that will help your dealership run like a well-oiled machine. Install a difficult technology system with a low adoption rate and you will have a huge problem on your hands. Plus, you may even find yourself struggling to onboard, or reboard, your employees as you open for business this summer with new regulations, more virtual experiences, and an even greater reliance on technology.

Ready to Recruit?

The beginning of 2020 saw record low unemployment. But the pandemic has forced many businesses to close or furlough their staff leading to a huge shift in unemployment claims. If your dealership isn’t hiring right now, use this opportunity to build a strong career website. And, if you are, make sure your site is attracting tech-savvy talent who are willing to meet the new challenges of your digital dealership. Our partners at Hireology have outlined several best practices and strategies in their Career Site Playbook.

Watch the full presentation and discussion with Mandi and Dale in the video below.

HELPING OUR CLIENTS MAINTAIN BUSINESS CONTINUITY IS A TOP PRIORITY. VISIT OUR BUSINESS CONTINUITY TOOLS & RESOURCES CENTER FOR MORE.

 

 

¹BARC Institute, 2014 Information Culture Study.
²Apr 11 CAI dealership survey)

Making the Digital Shift to the New Business Environment

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Optimizing Technology, Tools, and Processes – An Interview with Matthew Hurst, Sr. Director of Client Services at Dealertrack DMS.

As dealerships navigate the “new normal” under social distancing restrictions and safety regulations, the stark reality of reductions in staffing, fears of economic downturn, and even closures is starting to sink in. With so much disruption forcing dealers to make large-scale changes to their business environments, could there possibly be a silver lining to all of this?

We asked the Senior Director of Client Services for Dealertrack DMS, Matthew Hurst, to help us find one. “Even though this is probably the most challenging time, economically, that dealers have faced,” Hurst shares, “It’s also an opportunity to learn what processes your dealership wants to change, and to meet the new standards of the new normal.” Here are his insights on where to look to optimize your dealership’s digital shift as you navigate these changes.

Utilize Technology and Tools to Better Optimize Your Processes

Dealerships with multiple rooftops may have been running their accounting and month-end processes independently, with multiple teams, various processes, and unique reports. Yet, your Dealer Management System makes it possible to consolidate this process. “Some of the technology that enables social distancing for dealers has existed, mostly for Fixed Ops, for years,” Hurst explains, “And now we’re seeing more dealers implementing tactics and tech that some of the more creative dealers have already been using.” The ability to deliver remote service options, run intercompany accounting in one location, and lifting IP restrictions to allow more employees to log in and work from home aren’t necessarily groundbreaking technology tools—they’re simply optimized processes.

Build Proficiency Into Your Roles

As business owners make the difficult decision to reduce hours, more dealers are cutting back staff and personnel at their stores. The other side of this, according to Hurst, is that many team members are taking on more responsibility outside of their traditional experience. “You may be doing a completely different role today than you were doing yesterday just due to the economic challenges taking place. Being able to pick up and learn multiple functions with the training staff and support team that we have to help you—and to do that remotely? That’s huge.” Dealerships may be doing more with less, but this could be a golden opportunity for individuals to diversify their skillset. Hurst suggests using this time to build new skills with online training, develop career collateral, and become more proficient at your job. And for managers, this may be the best time, with foot traffic reduced, to make sure your team is up-to-speed on every area of the business. “For managers, first identify the areas where you want your team to improve. We have an extensive knowledge base in DMS360, and on-demand video training in LifetimeLearning for your team to pick up skills and training for every area of the dealership.”

“The auto industry has been a slow industry to really change and shift and go into this digital environment. But, now, we’re in a position where everyone is forced to operate in this model.” – Matthew Hurst, Sr. Director Client Services, Dealertrack DMS

Drive Your New Virtual Environment for the Right Reasons

When it comes to implementing new processes, your dealership should be taking the right steps to ensure safety for your customers and staff. But, make sure that as you do so, you really strive to do it right. Putting new processes in place simply to comply with regulations isn’t enough, Hurst explains. “These new changes may never completely die off.” Businesses need to have the true safety and wellbeing of everyone in mind when implementing social distancing measures. He outlines a few examples that benefit both safety and business:

  • F&I Laser Forms – Implementing F&I Laser Forms gives shoppers the ability to sign forms from home, reducing in-person interaction. This improves safety, but it’s also tremendously convenient. People have the option to safely print and sign important forms in various business situations and the general public expects it when making a major purchase like buying a car. The auto industry has been traditionally slow in this key area.
  • Working From Home – Remote office environments are having a moment across nearly every “non-essential” business sector. The ability to access your DMS 24/7, removing IP restrictions, and having access to real-time, live data is essential. Dealers need to adopt this process now. When flu season returns, as it does every year, it should become the new normal to keep anyone who has been exposed to a sick person at home. Even if we’re not facing a pandemic, slowing the spread of infectious disease is a smart safety procedure that can be implemented. If you need help managing your network systems, most DMS providers offer Managed Network Services to keep your dealership’s network uptime running smoothly.
  • Remote Service Options – XTime provides options such as Engage and Inspect that allow customers to set up appointments, make payments, and drop off vehicles for service without in-person interactions. When social distancing is necessary, this is vital. When it is not vital, it provides a service your customers want.
  • Virtual Showrooms – AutoTrader delivers opportunities for drivers to see vehicles, inside and out, and learn everything about them from home. It’s a huge advantage. Virtual test drives provide a buying option for customers you haven’t reached yet, may be too far to visit your dealership, or an option when social distancing takes place.

Without minimizing the current challenges dealers are facing, Matthew Hurst recognizes that the automotive industry is facing a unique time in history. “I think there are advantages to having implemented these new processes. That’s the silver lining.” Hurst explains. Innovation is the brainchild of necessity and our partners in the industry are finding unique ways to solve problems that are truly unprecedented. “The auto industry has been a slow industry to really change and shift and go into this digital environment. But, now, we’re in a position where everyone is forced to operate in this model.” As we all make our way into recovery-mode, the lessons learned will shape the way the auto industry thrives. Learn more about the process opportunities your dealership can implement today by visiting our Business Continuity Tools & Resources Center.

Daily Practices for Outlasting Economic Difficulties

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When an economic downturn hits your dealership, it can feel like the end of the world. It’s easy to get caught up in worst-case worries, survival strategies, and frenetic forecasting, and to forget about essential dealership functions. The key to getting through an economic downturn, however, is the precise, daily performance of seemingly minor operational activities. In other words, you’ll need to stop acting like it’s the end of the world and start working like it’s the end of the month—every single day. Keeping an end-of-month mindset is the best way to cut unnecessary expenses, free up cash flow, and account for every single dollar, every single day.

Reconcile Bank Accounts Daily

In a downturn, cash flow is king and you need to stay liquid. Every penny counts when sales are slow and cash is tight, which means that you need to pay extra attention to your receipts and outlays. Reconciling bank accounts daily may seem like a small matter of matching records, but it can tell you so much about your business while painting a crystal clear picture of your financial position. What needs to be paid now and what can wait? What’s outstanding and waiting to be cashed? What contracts are you waiting for from banks? Are you paying cars off quickly to your floor plan vendors? If you’re already a Dealertrack DMS customer, the bank reconciliation tool helps you reconcile all of your transactions in the DMS and lets you compare quickly and easily with your bank statement. Don’t wait until the end of the month to reconcile bank accounts. Instead, make it a priority to do it every single day and with every account to avoid critical cash flow problems.

Post All In-Process Car Deals Daily

When business is booming, it’s understandable for completed car deals to pile up before the end of the month.. But, when times are tough, waiting until the end of the month to post deals prevents you from knowing exactly where your dealership stands from a financial standpoint. Even worse, when unposted deals sit around, your contracts in transit can start growing , even as floorplan vendors continue to collect from you. Under normal circumstances you can likely cover this, but when cash flow is squeezed, this is especially problematic. Make it a priority to get all of your car deals posted as soon as possible. Also, don’t forget to stay on top of fleet deals, wholesale deals, dealer transfers, and other volume deals that can multiply cash flow problems by many times.

Clean up Vehicle Inventory Daily

Of course, a lot of your balance sheet is tied up in vehicle inventory and it’s critical to know exactly where to stand. To succeed in an economic downturn, you need to know exactly what you have at all times. If you aren’t already, begin performing regular physical inventories, touching every vehicle, and ensuring that the DMS is correct and that inventory reports are clean and accurate. Use the Inventory Exceptions Report to review and clean up anomalies. To preserve cash and save floor plan costs, be sure to actively manage your older inventory regularly, then have a plan for getting rid of stagnant units.

Clean Up Inventory Schedules Daily

Just as important as reconciling inventory reports every day, is the daily practice of cleaning up inventory schedules. Schedules are complex, and keeping them clean isn’t always a top priority for dealerships. Under normal circumstances, dealerships often put this mundane task off until the end of the month. But, in order to get an accurate picture of your balance sheet, you’ll need to do it regularly during the downturn. Just remember that cash is king and you can’t make good decisions when you don’t know your true cash position.

The current landscape poses unique challenges for dealerships, and many will be tempted to shift priority from routine tasks to big-picture planning. But instead of worrying that it’s the end of the world, work like it’s the end of the month every single day. Pay regular attention to details that can impact your cash flow and your ability to make smart financial decisions. Adopting an end-of-month mindset is just a small step in a larger process of reimagining your business environment to be more efficient. Dealertrack DMS can help streamline your dealership processes and operations so you can keep your dealership strong during difficult times.

Communicate Your Plan

Routine tasks sometimes require routine, mundane measures to get the job done right. As you approach month-end, record everything that needs to be done, then circulate your list digitally and check it twice with your managers. In the days leading up to the end of the month, meet with your managers to make sure everyone is on the same page. In today’s environment, video conferencing platforms like Zoom, GoToMeeting, and Microsoft Teams, can be a great way to host month-end meetings when not everyone can gather in person. These meetings not only ensure that every department is prepared, they prevent loose ends from tying up your resources and delaying your processes. It’s a simple, but important step to maximize efficiency at a time when details matter.

Take Inventory of Assets

The primary purpose behind month-end closings is to put your finger on the pulse of your dealership, determine its health, and make adjustments where necessary. During times of economic downturn, this process becomes more important than ever. Start by taking inventory of your physical assets. This includes new and used vehicles, as well as fixed operations and parts. Make sure all your sales are final and your expenses are recorded, then reconcile your physical assets with what you show in your books. This simple process ensures that mistakes don’t carry over from one month to the next, and gives you an updated picture of your dealership.

Analyze Trends

Month-end is a time to look for bigger-picture business trends. If anything is missing or out of place, track it down and find out what went wrong. This ensures continuity from one month to the next. But it also allows you to look at the finer details of operations and make comparisons that might otherwise go unnoticed. Look at your expenses to see whether they’re high or low for a given month, and try to find explanations, and ways to improve for the coming month. This type of cost-cutting vigilance will be especially important in the coming months as current events continue to put pressure on profits. Looking for trends on a monthly basis helps you to continue positive trends, reverse negative ones, and gauge the overall health of your dealership.

Measure Performance against Key Objectives

You’ve taken inventory, you’ve analyzed trends, now it’s time to measure your performance as a dealership. Add statistical memos and postings to your financial statement to get a more detailed view of your business . Then, measure your performance against your business goals. This last step can be key to evaluating your business in the current landscape and giving feedback to managers and employees about what’s working and what can be improved.

If all of this sounds like a complex, detail-driven process, you’re right. Month-end is a full-dealership, every-department, all-hands-on-deck coordinated effort. But that doesn’t mean it can’t be efficient. Take advantage of the resources provided by Dealertrack DMS. Stay in touch with your Performance Manager in the days leading up to month-end. Ask questions about how to make your processes more efficient, and for specific ideas to identify areas of improvement.

The coming months may place strain on your dealership, but by being efficient and paying close attention to the small, routine details, you can get a better view of the big picture to ensure the health and continuity of your dealership.

Helping our clients maintain business continuity is a top priority. Visit our Business Continuity Tools & Resources Center for more.

Six Guiding Principles for Change

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Choosing a new Dealership Management System is a big decision. Your dealership may have outgrown its older technology, or it may simply be time to let go. Whatever the reason, finding consensus from key stakeholders will ensure a smooth transition.

Every dealership is unique. However, the formula for building stakeholder consensus is straightforward. Here are the Six guiding principles for bringing change into your dealership.

Start Early

Experts agree that dealers begin the process of making a DMS switch at least 18 months in advance. It may feel like a long time, but there can sometimes be years and years of legacy data to dust off. “All too often, however, fear of change can hold you back from sorting through your outdated technology, cleaning up data or taking that first step toward a DMS switch,” says Susan Moll, Senior Director of Installations for Dealertrack DMS. Don’t wait and put your team in a rush.

Let Go of Old Habits

It’s tempting to continue working with your current provider because “this is the way we’ve always done it.” Keep in mind that the temporary discomfort of change pays off in the long-run.

Empower Leaders

No single piece of technology impacts every department within your dealership like your DMS. So, be sure to involve as many department leaders as needed to ensure its success. “The more you empower people to help, the more they’re going to own the new DMS,” according to Jennica Kresbach from Van Horn Auto Group.

Communicate

This should go without saying—but that’s the golden rule—nothing goes without saying! Share updates, status reports, meetings, timelines and more with your staff. Keep that “open door policy” going and engage with anyone who may be rattled by change.

Teamwork

Teamwork makes your DMS switch work. Don’t isolate decision-making to just a few high-level people, or else some key stakeholders will feel left out. Especially for multi-store groups, collaborate on decisions.

Remember Why You Started

Don’t forget to keep your North Star insight when you hit a speedbump or encounter a rough patch. Reward your team for the progress they make and remember that success is shared across the organization.

Get your whole dealership onboard with a DMS switch. Get your copy of the The Road to Consensus here.

“Must-Dos” for Year-End Excellence and a Fresh Start to 2020

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This article originally appeared in Digital Dealer here.

By Susan Moll and Matt Hurst

A new year and a new decade means new opportunities for your dealership. But with the new, comes closing out the old. From completing 1099s and W-2s to updating model lines and account numbers, finding balance after the end of the year requires a combination of efficiency, organization, and partnership with your DMS provider.

The following are some “must-dos” to help you take control and ensure a clean slate for 2020.

1. DO repeat after us – January 31, January 31, January 31. Make sure that date is in your calendar and that you have alerts set far in advance because January 31 is when your W-2s, 1099s, and 941s are all due. Start getting these forms ordered, printed, and filed as early as possible, to keep your dealership running smoothly and on schedule.

2. DO create a year-end checklist. When asked what her secret to a successful year-end process was, Lori Garrison’s response was clear and concise – build a checklist. Garrison, who is the controller at Huffines Auto Group, uses the same checklist year after year and modifies it with notes or memos when anything important about the process changes. Whether it’s updating tax tables, ordering forms, or filing and paying vehicle inventory taxes (VIT), everything she needs to close out the year is found on the checklist.

3. DO conduct an annual physical inventory count and reconcile any discrepancies. It’s critical to count your physical inventory at least once a year to make sure your parts inventory value matches what is actually on the accounting books. This count will help ensure that all necessary adjustments are made so you don’t carry any deficits into the new year.

4. DO only what you can do. “As a controller and manager, it’s important to make sure you’re always empowering your staff rather than micromanaging them,” explains Garrison. “You should only do what only you can do.” In other words, delegate the work and entrust as many tasks as possible to your staff rather than trying to touch everything yourself. By doing this, your staff can broaden their understanding of the business and you can focus on the responsibilities that fall strictly on you.

5. DO remember there are ways to stay on top of year-end reporting all year long. Lisa Feagin, the controller at Tom Bush Family of Dealerships, recommends running your month-end process like your year-end process. “By reconciling account accruals and write-offs every month, you’ll be able to spend more of your time focusing on the minute details at the end of the year, such as putting accounts under a microscope to catch any errors or discrepancies,” she explains.

About the Author

Susan Moll, Senior Director of DMS Field Services, Cox Automotive. Matt Hurst, Senior Director of Client Services, Dealertrack DMS.

This article originally appeared in Digital Dealer here.

“Must-Dos” to Find Efficiencies in Even the Most Routine Tasks and Costs

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This article originally appeared in Digital Dealer here.

Back in August, we started our article series of “must-dos” by looking at the overwhelming weight of dealer expense structures on gross profit margins.

In Q1 2019, an average dealership’s expense structure was 106 percent of its gross profit, while in Q2 2019, it was 98.5 percent, according to data from NADA’s dealership financial profile series.

So, how did automotive dealerships fair overall last quarter? Marginally better. NADA’s Q3 data now puts the average dealership’s expense structure at 98.3 percent of gross profits. While we’re seeing movement in the right direction, the average dealership’s gross profit margin continues to fall below two percent, indicating there’s still a great deal of work to do to get costs down and profitability up.

Despite these findings, a small poll we conducted recently, suggests controllers remain optimistic about their dealership’s ability to generate profits. Results from the poll showed 50 percent of respondents reported they were confident in their dealership’s ability to generate profits today, while approximately 73 percent were confident in their ability to generate profits in the next two to three years.

Although we just captured a small pool of controllers with 26 respondents, the message seems as clear as the opportunity for dealers. The ones who handle the finances, the accounting, the general ledger, the “beans” themselves, feel positive about the direction their dealerships are heading in.

But with gross profit margins sitting where they are, how do you take action to maximize profitability? For the controllers we polled, increasing operational efficiency and reducing expenses rose to the top of the list. While these tactics can get accomplished in several ways, we recommend first doing a deep dive into the most commonly completed tasks and recurring costs at your dealership.

As the adage goes, what you do every day matters more than what you do once in a while. Because the DMS is the daily hub of your dealer operations, it’s a great place to begin mining for additional time and cost savings that will pay you dividends down the road.

To help you get started, we compiled the following list of tips and must-dos from controllers who have experienced firsthand the benefits of increasing efficiency in their daily dealership operations.

1) DO look for ways to automate or streamline repetitive tasks to help reduce non-value-added time. Eliminating non-value-added time has become a focal point for Joe Burris, corporate controller and chief accounting officer at Lou Fusz Automotive Network.

“I’m constantly looking for ways to automate or reduce non-value-added time across my dealer group when it comes to tasks and processes we do daily, such as billing, paying and processing vendor invoices, stocking vehicles, paying out warranty claims, and processing parts,” says Burris. “While I can’t control sales volume or gross profit, I can control my costs, including ones I’m responsible for to positively impact profits.”

2) DO give your staff a platform to voice their suggestions. While keeping a close eye on industry benchmarks and data is crucial, Burris urges that the most effective way to find wasted dollars is by looking through the lens of your team. Observe your staff and talk to them about their day-to-day jobs and processes. “By listening to their suggestions and ideas, you can find new and improved ways to do more with less,” Burris notes. Make sure to reward those individuals who offer recommendations and actively participate in the process of improving and streamlining dealership operations.

3) DO divide big quarterly or annual tasks into smaller weekly or even daily items. Breaking down the quarterly or annual tasks into smaller, more digestible ‘to-do’ items is key for Lori Garrison, the controller at Huffines Auto Group. “This not only saves you from being overwhelmed at crunch time but also makes it easier to find and correct problems/errors before they get worse or cause your dealership penalties,” notes Garrison.

With account payables, there are hundreds of vendors to keep tabs on. To tackle this, Garrison maintains a spreadsheet tracking the dates and amounts with each payment made, which helps her to easily spot anything outstanding or incorrect. Garrison also reconciles every day. “Whether it’s last in, first out reports or payroll accruals, there are a million things that can go wrong in a week and a billion that can go wrong in a month. If I reconcile every day, it’s easier to find and resolve issues and I sleep much better at night,” she explains.

4) DO use technology to your advantage. Garrison uses the general ledger import function for everything. “I tell my team that if it’s more than three lines of information, import it, don’t rely on rekeying the data. It’s faster and creates less room for error,” she notes. “There are so many helpful tools and features in our DMS that I try not to do anything by hand anymore. The same goes for stocking in inventory. We pre-stock vehicles into the system using our OEM invoices. We keep them marked as ‘in-transit’ until they physically arrive, but we get them all set up ahead of time.”

5) DO keep a close watch on your managed accounts. Lisa Feagin, the controller at Tom Bush Family of Dealerships, suggests checking each managed account at least three times a week to ensure contracts are being funded and departments with different P&Ls are splitting funds properly. She uses a combination of financial reports from her DMS to visually scan for abnormal amounts or duplicate entries and trains her finance managers and bookkeepers to study trend reports across the new, used, parts, and service departments weekly.

6) DO stay proactive even when your business is in a good place. “Dealers can’t get complacent when things are good,” cautions Feagin. “We’ve had a fairly strong growth year, and it’s easy to let expenses get out of hand if you loosen the controls.” To stay ahead, Feagin closely monitors expenses by cross-indexing them against volume. Did employee overtime and staff hiring go up to accommodate higher volume? Was that necessary? What about tools and supplies? Are rising costs due to price increases or a result of waste or misuse?

Stay tuned for more “must-dos” to keep your dealership running efficiently all year long.

About the Authors
Susan Moll is Senior Director of DMS Field Services for Cox Automotive, and Matt Hurst is Senior Director of Client Services for Dealertrack DMS.

This article originally appeared in Digital Dealer here.