Tag: Accounting

Information is Good. Knowledge is Critical.

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Working in retail automotive, we hear a lot about data. It’s practically everywhere—troves of it. In fact, most dealer management systems are filled with all the data we could ever need. And if we had time, we could dive in, all day long, and consume it.

It sounds like a joke, but when it comes right down to it, a lot of us simply throw our hands up. Instead, franchise dealerships operate month-to-month—most of the time looking back at past performance. How did we do? Where did we fall short? Were we close to hitting our goals? Just imagine if we could flip that. Harnessing predictions, unlocking data’s true potential, and influencing key-decision-making would make it possible to act fast, and take swift action based on data, not just our gut feelings. The events of 2020 and 2021 taught many dealers a lot of valuable lessons about the ability to pivot and adapt to change. But if we can’t leverage data—without always being reactionary—the true cost to our business will always be realized in hindsight.

Actionable Insights We Can Use

As a Performance Manager, I have the privilege of spending time working one-on-one with franchise dealers, helping them get the most out of their technology. Whether we’re standing up a new Dealer Management System, working out a new integration, or updating processes, there’s almost always a rough spot or two to work out. But there’s never a lack of data to sort out. One of the more rewarding parts of the job is seeing the “lights turn on” for those new hires and team leaders who’ve tapped into their DMS and found data and analytics that deliver action-based insights. And that’s kind of the whole point. If your reports aren’t easily digestible, organized by role, and flexible enough that senior leaders have access across departments, then they probably won’t see much use.

KPIs that Drive Productivity

Everyone who has worked in a dealership has been frustrated by underperformance. Yet, the push to “just do better” or “increase production” rarely does the trick. Upping the hours your service team works doesn’t result in higher profitability. It usually results in burnout, overworked staff, and a net loss. Data from your DMS—when paired with Critical Analytics—works like a high-powered calculator. With detailed dashboards and reporting modules, our partners get drill-down KPIs into the daily performance output of team members across the dealership. This is the kind of data that you can use to take small steps, day-by-day, month-by-month, to improve by setting benchmarks and goals that result in sustainable productivity. So you can ditch the guesswork and help your employees, all the while avoiding burnout.

The Future is Data-driven

Data is not a temporary technical advantage. It does more. And we’ve yet to unlock its potential within the dealership. Right now, we’re at the tip of the iceberg of how data analytics can improve our industry. When it comes to understanding where our revenue comes from (or why it’s suddenly going to crash), we need to use data to look six months or further into the future of our business projections. Critical Analytics within the DMS provides monthly predictive dealership pacing, based on how you’ve performed so far. So, for example, when those cars come back onto your lot to sell, you can be prepared. But, our team is still thinking bigger. Imagine harvesting DMS, CRM, F&I Data all together to look even further. There’s more to the picture that we’re not seeing. The insights are there.

Data from your DMS matters more than ever. Automotive technology is more integrated, more interconnected, and more powerful than it’s ever been. If we can make the mindset shift from hindsight to foresight, our ability to drive change before a disaster will be unmatched.

Ready to learn more? Schedule a demo with your Performance Manager to uncover the data within your DMS using Critical Analytics today.

About the Author

Tom Tellepsen | Dealertrack DMS Performance Manager

 

Tom Tellepsen is a Performance Manager at Dealertrack DMS with over 18 years of experience helping franchise automotive partners reach their goals by optimizing budgets, building better operational procedures, and obtaining the right mix of tech and talent. Prior to joining Dealertrack, Tom worked as a General Manager and General Sales Manager in some of Virginia’s leading franchise dealerships.

Embracing the New Digital Era of Accounting

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In times of industry turmoil, the big tend to get bigger, and the small, well the small sometimes don’t survive. It’s the natural evolution of the industry, but that doesn’t mean small dealerships are doomed to unavoidable extinction. There are ways to adapt to industry change and stay atop the proverbial pecking order, for dealers of all sizes. And, as it turns out, the right controller and the right accounting team can mean the difference between dealers that thrive and those that are struggling to survive.

The Difference Between Thriving and Surviving Dealerships

Within the past 18 months, we have seen our own version of “survival of the fittest” in the automotive sales industry. As circumstances have forced dealers to adapt to a new way of doing business, some dealers have embraced digital experiences, while others have been less eager to evolve and have felt the difficulties of a down economy.

In general, top-performing dealers—those that have become more profitable and efficient—have accelerated their adoption of digital technology significantly more than the static dealers—those that have become either less efficient and profitable, or stayed the same.

Unfortunately, even among those dealers that have adopted digital technology, some have walked back the progress they’ve made—perhaps explaining why only 62% of static dealers believe that digital changes will create long-term benefit, compared to 83% of thriving dealers.

Communicating at the Speed of Digital

Out of necessity, the digital era has introduced a new, more efficient way of communicating within dealerships. Over the past 18 months, dealers have had to rely on Zoom calls and other modern forms of communication, just to survive. These new technologies have enabled dealers to communicate better, but they’ve also resulted in dealers communicating more—an ironic technological twist, considering we’re also working apart more than ever too. It’s easier than ever, for example, to hop on a Zoom call with a parts manager to learn new processes. If dealers thought they were communicating well before, the new digital era has introduced the industry to a higher level of communication efficiency.

In the accounting office, where communication is often done with numbers and documents, the digital era has paved the way for more paperless adoption. Prior to the pandemic, dealer accounting offices were slow to adopt digital document scanning. But now, as people work from home and can’t be near the source documents nearly as often, the industry went from 50% adoption to full adoption, nearly overnight. Even if these new processes were forced on dealerships, their benefits will be felt well beyond a window of temporary distancing because, simply put, it’s a better way to communicate long-term, and it creates efficiencies that are felt throughout the entire dealership.

Integrity of Numbers and Integration Across Channels

One way dealerships experience inefficiency is through a general lack of communication between disconnected technologies. When one department’s technology says one thing, and another department’s technology says something completely different, it can be a nightmare for accounting offices to figure out whose numbers they can trust and how to reconcile the differences.

If the goal is integrity in numbers (and it should be for every dealership accounting office), integration of technologies is hugely important in the new digital era. When technology is integrated with the help of a centralized DMS that connects every department’s technologies across the dealership, controllers don’t need to worry whether they can trust the numbers on one department’s dashboard. They don’t need to worry about why the CRM data doesn’t match the customer pay repair orders on the financial statement. Integration is automatic, and it’s more important than ever before as dealers embrace digital.

In Closing…

No matter what some dealerships believe, the digital advancements made during the past 18 months are here to stay. They have already started to separate the evolving dealers from the static dealers, and they will continue to act as a dividing line between dealers that prioritize profitability and efficiency, and those that don’t.

As your dealership continues to embrace digital, give your accounting team the tools they need to enable better, more efficient communication between your teams and between your technologies. Empower them with improved communication and integration and your dealership will continue to evolve in the new digital era.

About the Author | Karli DeVall

Karli DeVall is the CFO at Tim Dahle Nissan and Red Rock Auto Group. Prior to her current role, she spent ten years running an accounting and consulting practice in the retail automotive industry where she specialized in fixing broken accounting offices. She is passionate about the role that controllers and accounting teams play in the business and looks for ways to empower teams to connect and showcase their skills to their community.

Empower Your Accounting Team to Build a Better Dealership

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Dealers are great at finding ways to become more profitable. In 2020 alone, nearly three out of four franchise dealers added at least one digital retailing solution to meet the needs of a public more interested in servicing their car (or buying their next one) online. But they rarely focus on their accounting team. The consensus I hear is that dealers are simply too busy to be bothered, and, well, if it’s not broken don’t mess with it! But if you’re overlooking your accounting team—missing training opportunities or recognizing objections to progress—you’re headed for trouble. Profitability, and profit retention, go hand-in-hand with an empowered and efficient accounting department.

Identify and Overcome Objections

There’s real risk in sitting back and settling for the status quo. It may be easier to focus on the quick wins and avoid disrupting the one team that always checks their task list. And change can feel disruptive, and scary, at first. But it’s worth looking at what may be holding you back.

  • They’re busy. But are they busy doing things that add actual value to your dealership? Or just busy doing busy work?
  • They get the job done just fine. Your competition does it faster, better, and it results in a better customer experience.
  • They push back on new technology. So, what are you doing to help bring in tools, training, and technology that makes their work more fulfilling?

The past eighteen months have put a lot of stress on you and your business. (And you’ve handled it in stride.) Many dealerships have added tools and processes that have improved the way we communicate across dealership departments in ways we didn’t even realize needed improvement. We’re faster at what we do—and better off for it. Now, it’s time to focus on the team that provides critical information and insights to the decision-makers at your business. With the help of your dealership’s accounting tools—specifically your Dealer Management System—your accounting team can do so much more.

Prioritizing Ongoing Training

The vast majority of industry training and education is focused on helping the dealer principal and the general manager. Controllers and accounting teams don’t often get opportunities to attend conferences or get access to new learning and training events. They don’t get to collaborate with their industry peers to see what’s working and what’s not working at other dealerships. True to tradition, they’re usually back at the dealership, dutifully performing their tasks. But given how important a well-run, well-educated accounting office can be to dealership profitability, this has to change.

Sharing knowledge is empowering, both for the sharer and the learner. That’s how accounting teams learn to take on new technologies and figure out new ways to do things, instead of just falling back on the way they’ve always been done. When we pulled together nearly 300 industry experts in one room for a rare Controller Conference, pre-pandemic, we almost didn’t need vendor trainers to help lead the group. The simple fact is, we learn better when we learn together and share what we know. And research from Harvard Business Review supports it. When we take an active role in learning (i.e. get outside our dealership comfort zones and talk with our peers), we internalize concepts better and produce better outcomes.

Simple Steps, Big Payoff

Dealerships that prioritize and invest in staff growth tend to be both more efficient and more profitable than other dealerships. In fact, 74% of top-performing dealerships make sure that their employees are satisfied and well-trained in how to use new technology, according to Cox Automotive research. Consider the following practices when looking for ways to empower your accounting team to learn and grow. Your dealership will be better for it.

  • Go Forth & Learn: Learn about new technology by having your controller and the accounting office leaders attending tradeshows, provider-sponsored events, training seminars, and other industry gatherings. Then invite them to share the information with dealer management to find ways to improve.
  • Unmask the Superheroes: Identify “super users” of your technology and rely on them to teach other team members how to leverage technology to your dealership’s advantage. Hold lunch and learn sessions across rooftops and invite these people to meet and mentor new team members.
  • Virtual Learning: Network online with industry peers, including those from accounting offices at other dealerships, through on-demand training resources like DMS360 and additional summits through your technology provider.

Understanding the ‘Why’ of What We Do

Accounting offices in car dealerships are rarely actually accounting offices. Most often, they are task-management offices, with hard-working, well-intentioned employees who have been taught to complete lists of tasks, without ever really understanding why they’re doing what they’re doing—the actual accounting at the foundation of their busy work.

Among other implications, this lack of big-picture vision can be stifling for dealership growth. When new technologies are introduced—some of which are necessary to future-proof the dealership or to ensure increased efficiency in a competitive industry—the accounting employees are often the first to push back. They push back because they’re stuck inside their list of to-dos.

On the other hand, when controllers and accounting teams have a better understanding of their roles, and how they play an integral part in the dealership’s success on so many different levels, it becomes empowering. Employees see a greater purpose and find the motivation to improve how the entire organization operates, instead of just honing task-management skills.

When accounting employees understand the balance sheet implications and the trickle-down effect of their tasks, they’re more likely to get on board with industry and dealership-level changes. The fear of change takes a backseat to the excitement for new processes and technology that can pave a new way forward. When they begin to see the big-picture and their importance within the master plan, they become more loyal and more connected, which can transform a traditionally “slow to adapt” team into one that embraces progress.

As you seek to empower your accounting team, take time to teach every member, from the controller to the most entry-level position, the “why” behind what they do. It will have a profound impact on your dealership in producing more direct results with more accurate information.

In Closing…

It’s time to adjust your focus to see just how profoundly your accounting team can impact profitability. Empower your team with the educational resources, big-picture perspective, and technologies to ensure that your dealership is operating efficiently and profitably, and you can begin to build a better accounting office and a better dealership.

About the Author | Karli DeVall

Karli DeVall is the CFO at Tim Dahle Nissan and Red Rock Auto Group. Prior to her current role, she spent ten years running an accounting and consulting practice in the retail automotive industry where she specialized in fixing broken accounting offices. She is passionate about the role that controllers and accounting teams play in the business and looks for ways to empower teams to connect and showcase their skills to their community.