An Owner’s Frustration!

I often run into dealers who tell me that the dumb computer just won’t cooperate and behave itself. When I inquire further into this comment, the owner usually means that he or she cannot retrieve data from the computer to make informed business decisions on a daily basis. Interestingly enough, the owner is not aware that his accounting department is using a make-shift chart of accounts that has been designed by twelve people during the last four years. The reason the owner can’t determine his inventory turns is because the accounts have not been set up correctly. The reason he is not able to determine how much of his service income is coming from internals as opposed to retail customers is because the only account that exists for the Service Department revenue in accounting is called, “SERVICE SALES.” There is so much to say about a chart of accounts that time will not permit me to conduct a detailed discussion on this matter. What we can do is give you a sample chart of accounts for you to examine, and then you can contact us with your specific questions. Enjoy yourself!

The following provides an example for setting up your chart of accounts. You as an RV/Marine/Auto Dealer can use this as a template for designing your own chart of accounts. You can change the template to fit your needs, of course. Please note that generally speaking, every REVENUE ACCOUNT has a corresponding COST ACCOUNT which is exactly 1000 numbers apart. For example, Revenue account 4000 goes with Cost Account 5000. You should always follow this simple pattern to facilitate your accounting.

NOTE: This is a simple set-up, but you can make it more detailed if you wish. For example, instead of one account called ‘Advertising’, you can make four accounts: 1) Advertising – TV; 2) Advertising – Newspaper; 3) Advertising – Internet; 4) Advertising – Billboards. The trick is to set up your chart of accounts right the first time; otherwise, it will become a nightmare to administer your dealership operations. Also, any chart of accounts that you set for your dealership should be blessed by your CPA.

Sample Chart of Accounts
I can’t give you everything. lol You should really purchase my book and it will show you examples.