As a CPA, I'm generally one of the top three trusted advisors to whom my clients look for advice. But much of the advice requested of me these days seems away from the general office and away from accounting.
Operations, profitability, strategic planning and pay plans are many of the items that I discuss with my clients now.
However, as these questions became more prevalent, I knew that it was imperative that I have first-hand knowledge of the management team that ran my clients' stores. I needed to be on a first name basis with the department managers and understand their needs and frustrations.
To do this efficiently, I knew that I needed a fairly quick method to visit existing clients and gain their trust. Therefore, with the assistance of the specialists that are employed by Dixon Odom in multiple disciplines, I took on the idea of creating a comprehensive way of looking at a dealership. That includes the following:
- The condition of the books and records
The foundation of a dealer's confidence is in the numbers he or she and the managers use daily to run their operations. These can be numbers surrounding money and gross profit. They can also be other numbers such as technician productivity and closing ratios. Your CPA should be familiar with all of the items that you study regularly. If you're not looking at some key indicators, your CPA should counsel you on why those are important and how they will further improve your operations.
- Cash management
It may not seem as important in these days of low interest rates. However, cash is still what all gross profit needs to turn into when it grows up. You should have a plan to maximize its usefulness in your store. Your automotive CPA should be able to inform you of all of the latest trends in banking and finance to assist in this goal.
- Computer utilization and system acquisition
They should also be a part of your CPA's arsenal to improve employee productivity and, as a result, your profitability. The vendors are continually pressing forward with new technologies. Make sure you are being kept aware of them.
- Pay plans and expense controls
These are items that go together in today's dealership. Your CPA can design pay plans that employees understand and that focus on the items important to overall dealership profitability. Pay plans need to cross departmental lines at times to reflect the need for departments to work together to achieve dealership goals. For example, consider the potential synergies if employees running the technician parts counter were paid off of the flat rate hours produced by the service department? This is becoming popular.
The old topic of internal controls has not disappeared either. However, your CPA should be able to tell you how to minimize your risk in those areas outside the general office also. Unscrupulous employees have utilized the very same technologies that make them more productive to also become more creative in stealing your hard-earned profits. Ask your CPA about theft-control methods so that you can be as creative as the thieves.
The specialized methods available to your automotive CPA for tax planning should be discussed at every opportunity. These opportunities arrive and depart with little fanfare and sometimes the windows are brief for advantageous actions.
Finally, your automotive CPA can discover things that are amiss between departments from interviewing your management team. They will tell him or her things that they have not disclosed to you. That begins the process of bringing solutions to bear sooner rather than later.
Don Ray is a Senior Member of the George B. Jones Dealer Services division of Dixon Odom PLLC, a national accounting and consulting group for automobile dealers. He's at 901-684-5643