A New Year’s Resolution That You Can Keep Starting NOW
By Jorge Arrieta
Let us help you start the new year with a bang. While best practices are recommended all year round, a great time to review your balance sheet’s health is right before the beginning of the New Year and be positioned on the right track with a few simple guidelines. We believe these five steps are fundamental to ensure a fresh start in 2020:
1. Perform a physical inventory of new, used, service loaner and company vehicles. Compare the physical inventory to accounting schedules and verify which units don’t agree. Obtain an explanation for any missing units with supporting documents from management. Follow up in 30 days to be sure exceptions are resolved timely. Units missing more than two months in a row should be reviewed by the General Manager.
2. Examine service loaners activity and test compliance with manufacturer programs. Ensure loaner agreements exist for every loaner in use and the agreement has been property completed with accurate mileage and customer information. Loaners can be used inappropriately for personal gain, such as Uber or Lyft services for example if not monitored and well documented.
3. Review repair orders in work in process. Conduct a physical inspection of the shop and verify a vehicle is present for each open repair orders. Watch for hidden receivables where the vehicle has been released without payment.
4. Perform a parts physical inventory count. If done internally, do not take the physical inventory at face value, test the findings such as large bin count variances in order to have a comfort level with the results. This should include an analysis of the dirty cores in the parts department. Make sure to track in DMS or manual process as compared to physical core inventory.
5. Carefully review any aged or uncollected items that may be uncollectible and need to be written off. Purify December schedules for a clean start in the New Year.
Performing these few steps at the end of the year can create a sense of a fresh start and confidence in the strength of your key assets. With the purification of key balances from the past, you can now focus on the success which lies ahead.