The NADA convention in San Francisco last month was quite a happening place, even though there was no one dominating issue as in past years.
But even in the absence of a single hot topic, the pace was still steaming! As exhibitors for the last several years, we get an opportunity to meet with hundreds of dealership personnel and find out what's on their minds.
We are always asked about the best (and sometimes the safest) tax strategies for dealerships. Recommendations include LIFO (particularly for new vehicles in the current economic environment), cost segregation studies (the benefit verses the cost is huge), deferral of internally generated profits (a big tax deferral for large stores), deferral of income recognition of floorplan assistance and valuation discounts.
Another big area of interest revolved around extracting data from the major DMS providers such as ADP and Reynolds & Reynolds. Our eTools Electronic Reporting System automates the extraction of specific critical information from either a Reynolds & Reynolds or an ADP DMS to Microsoft Excel(r) and then automatically reformats and places displays onto the PCs of the dealership management team.
We demonstrated these eTools to hundreds of dealerships.
We are always asked “What DMS should I use?” That's always a loaded question. We advise a dealer to prepare a formal “Request for Proposal” that addresses not just price, but current and future capabilities as well. The cheapest is usually not the least expensive ultimately. Get the right product with the right features at the right price.
Another area of great interest these days is the training of dealership personnel. The types of training that we get questions about range from general managers to office managers and from leadership skills to car deal processing.
While we and others offer seminar-based, web-based and even on-site dealership training, training sometimes is not the answer and we get asked to help locate a particular manager for a dealership.
Sometimes, it's not just personnel that dealers want us to locate for them, but dealership acquisition targets as well. There's a shortage of good stores available at good prices right now. Due diligence along with organizational and financing questions abound as they relate to dealership acquisitions.
Meanwhile, someone always wants to discuss dealership succession, whether it's a potential transaction with a child or a long-time manager. The methods that can be used here are as diverse as the city of San Francisco itself. The topic of succession should lead to a discussion of estate planning which is always on the minds of family members and management but often is something the “immortal” dealer does not wish to discuss.
Personnel counts and job descriptions are always of interest to dealership management along with other benchmarks applicable to dealerships.
A new idea is called “Remote Controller.” This is a structured program that allows accounting professionals to review monthly or quarterly the integrity of the dealership's accounting records off site via remote dial-in followed up with a written summary of observations.
Maybe one of the biggest areas of concerns by large dealership groups is the unauthorized activity that goes on in the F&I department. This specific area moves us on to the whole issue of fraud in the dealership; both how to detect and minimize it. Prior columns in Ward's Dealer Business have discussed this in detail.
Reflecting on all the things a dealer must do and consider, it's no wonder some people struggle in profitably managing a dealership and why the manufacturers have retreated from the retail bushiness. Yes, you dealers are indeed special and the NADA convention reminds each of us of that each year.
Don Ray is a Senior Member of the George B. Jones Dealer Services division of Dixcon Odom, a national accounting and consulting group for dealers. He's at 901-684-5643 and [email protected].