I recently visited Chicago, the “Windy City.” Did you know the Cubs aren't just chasing the wind this year?
They're actually chasing a pennant. Meanwhile, some top automotive CFOs in the country gathered in Chicago to see which way the wind is blowing in the car business.
Some of the discussions were uplifting and encouraging like a gentle breeze in the sails of boat. Some discussions explored the thunderstorms pummeling the automobile business.
Whether uplifting or tainted with peril, exchanges at this CFO conference were always on point. Consider the “Idea Session” competition that Bill Sebald of the Faulkner Automotive Group won. Let me share with you a few of the presented ideas that could be helpful in your business:
- Understand the premium basis and payroll allocation rules that govern Workman's Compensation premiums. Particular emphasis was placed on what “wages” should be excluded in determining the payroll base. It was also pointed out that often times state auditors are not aware or may simply choose to ignore some of these exclusions.
- If you are using a uniform company to supply shop uniforms, towels, floor mats, etc, these may not be the only items being taken to the cleaners; you may be as well! Make sure you are being both provided and charged for supplies and services that were agreed to in your contract with your vendor. If you are not sure how to best evaluate and negotiate your situation, there are consulting companies that check this out to ensure you get what you pay for.
- Consider ordering office supplies over the Internet under a master dealership group wide agreement with a single provider. Savings of up to 15% may be available, but perhaps even more importantly, the vendor can provide easy-to-read details about what is actually being purchased.
On another storm front, we heard from Robert Bekken an attorney with Fisher & Phillips, a law firm specializing in dealership labor issues.
He updated us on the perils that sometimes confront dealerships. Those dangers range from the reasonable to, at least in my mind, the absurd and may be as inconsistent as the weather throughout the country.
Steve Barrett and Charlie Robinson of Resource Automotive gave an update on the happenings with extended warranty and other reinsurance products. With the National Warranty fiasco still swirling around in our minds like a tornado, it was refreshing to be informed of the financial stability of Resource Automotive and established F&I firms like it
Gil VanOver, President and CEO of gvo3 Consulting, reminded us of the perils dealers face from their own F&I departments every day. Payment packing and identity theft are issues of common concern. VanOver emphasizes taking steps to minimize exposure to these disturbing practices.
Much time was spent during gusty attendee exchanges discussing the pros and cons of process-consolidation opportunities available to many multi-franchise dealership groups.
While much of the conversation centered on accounting office consolidations (hey, remember these are accountants), other areas of opportunity were explored as well.
These included reconditioning, advertising, body shop, switchboard operators and more. Of course at this time, the FTC Safeguards Rule and its requirements is on everyone's radar screen.
While most of groups represented believe that they are in compliance, there is concern that non-compliant dealerships will cause the government's stormy eye to zoom in on a lot of dealerships.
As discussed in an earlier column, much responsibility is being placed on the CFOs to ensure that their dealerships weather the tempests of the retail car business.
But as the winds continue to shift, it just keeps getting harder and harder to find a safe harbor in the storm. Perhaps you better make sure that umbrella (policy) is ready!
Don Ray is a senior member of the George B. Jones Dealer Services division of Dixon Odom, a national accounting and consulting group for dealers. He's at 901-684-5643 and [email protected].
