Phoenix. What a beautiful oasis in the desert. While there with a gathering of multi-dealership chief finance officers, I wondered how the city got its name. Here is what I found out from the Arizona Historical Society:
In the late 1860s, former Confederate soldier Jack Swilling and English Lord Darrel Duppa redug the vast network of irrigation canals built by the Hohokam Indians around 1000 AD.
Schooled in the Classics, Lord Duppa probably suggested the name after the Phoenix, a mythical bird that is reborn among the ashes of a previous bird. Others attribute the naming to Swilling himself.
The Phoenix area had previously been known as “Pumpkinville” for the squashes that grew around the irrigation ditches.
I'm not sure that the more than 20 CFOs I met with in Phoenix need to effect such drastic measures on their multi-dealership groups that Swilling and Duppa had to in the desert. But when you consider the dealership group CFOs vast responsibilities, their challenges remain daunting.
We discussed areas as diverse as the Welch Grid, Spam and gas charges.
Our agenda went like this:
Idea Session — Selected individuals brought the following ideas that they have used to improve the operation of their multi-franchise dealership group:
- Driving Process Improvement & Operating Efficiency
- Building a Strong F&I Department
- Factory Fuel Refunds
- Check Guarantee Service
- Loss Prevention Programs (voted the best idea)
- Open Lot Coverage
- General and Administrative Expense Control
Responsible Planning for Dealership Personnel and Their Families — Joe M. Gandolfo, Ph.D. This presentation covered areas as diverse as durable power of attorney, non-taxable awards to employees, defined employee benefit plans allowed under IRC 412(i) and much more.
Dealership Financing Opportunities presented by Falcon Financial. Falcon typically will loan a dealer more money for acquisitions, expansion, etc. than a conventional lender and has recently increased the number of lending programs it offers.
“Succession Planning” — Promoting people from the department manager level to the general manager level. The department manager level is key and how do you ensure the right selection and training? This topic took on a life of its own as it lead us on to talk about general manager training in areas of personal and corporate values, technical and leadership skills.
CFO Forum — Roundtable Discussion. This is generally our CFOs favorite part of our time together. Here we tackle current issues raised by the CFOs during the day. At this conference we discussed:
- Enterprise appreciation plans for key management
- The new RGS offering from Reynolds & Reynolds
- Professional and personnel development of key management
- Indirect Lender requirements
- The problem with Spam in the dealership
Standardized Accounting Policies — How do you develop and implement standardized accounting policies throughout your dealership group? The use of a standard chart of accounts and standard operating policies was pervasive among the larger groups. Smaller groups were encouraged to implement the policies while their size still made it easier.
What Dealership CFOs Should Know About Arbitration Agreements and Other Current Legal Issues — George M. Taylor, III, Partner with Burr & Foreman, LP. The use of arbitration agreements both with customers and employees was discussed in detail with samples provided.
Factory CSI Programs — Which ones work and what may be alternatives in the future? One thing was consistent…none of them are very good. Perhaps Jack Fitzgerald's adoption of ISO standards for his Maryland-based Fitzgerald Auto Mall stores is the way to go.
As our CFOs return to their dealership groups, I hope digging through this new information will be less demanding than digging irrigation ditches through the sand in the desert of Arizona. I do hope, however, that they have the same success with their “Phoenix” and don't get squashed in “Pumpkinville.”
Don Ray is a senior member of the Dixon Hughes PLLC Dealer Services Group, one of the nation's largest accounting and consulting group for dealers. He's at 901-684-5643 and [email protected]