Keeping Your Dealership Healthy – Monthly Routines
Why do people get physical exams? Why do they routinely visit the dentist office? Why do we get tune-ups on our vehicles? You know very well why we do this: to prevent future problems. Many a person has been very thankful for routine physicals that have helped them find out useful information. The information allowed them the opportunity to catch a disease early in its developmental stage and thereby avoid serious complications or even death. I believe this same concept applies to the RV business. I have learned a variety of routines that I believe will help you maintain your business in good shape and avoid future complications. We shall now consider seven monthly routines that should take place at your RV dealership.
7 Monthly Check-up Routines
- Reconcile your checkbook. Most dealerships have a main operating checking account for day-to-day expenses and a main savings account, just like we have at home. I am sure in your lifetime you have faced the consequences and humiliation of the NSF (non-sufficient funds) monster in your personal life. Well, the NSF monster usually appears when we fail to keep our personal checkbook accurately balanced on a weekly basis. With checks, debits, ATM withdrawals, and the checking VISA card, you almost have to review your personal checkbook every few days to keep yourself balanced; this requires a great deal of discipline! The same is true with dealership accounts. I have visited a variety of dealerships that tell me that they reconcile their checking account every few months, or they tell me that their CPA does this for them. When I ask when the CPA reconciles their checkbook, they tell me after the checks have cleared and when a bank statement is available; this can only mean that the checkbook is balanced 30 to 60 days after the fact. Do you realize what a disaster could be inflicted on a dealership when you thought you had $75,000 in the bank and you really had -$25,000? Discipline your dealership to reconcile your checkbook monthly. Don’t wait for a monthly statement; get online with your bank and GET A DAILY BALANCE AND CHECKS CLEARED REPORT. If your bank doesn’t offer online banking services, switch banks! You can never afford to be in the dark when it comes to your cash position. When you’re online with your bank, you can reconcile daily, weekly, and monthly. You can even perform balance transfers, stop payments, and perform deposit inquiries.
2. Reconcile Your Vehicle Inventory to the GL Account – a monthly inventory of units in stock compared to what is on the books is an absolute must. It is not enough to compare actual unit in stocks to your inventory report list. You must first get the inventory directly from the GL account maintained in the Accounting Office and then compare it to the monthly physical you performed. If a unit is sold or missing but money is still on the GL account, you have a problem. You might as well correct it now while you’re facing the problem as opposed to later. The bigger the dealership, the greater the possibility of error. Once the reconciliation is performed, file a copy of your working paper in a secure location.
There is more but you will need to buy my book.