Pub. 1 2021 Issue 2

43 RECONCILIATION IS KEY TO CASH CONTROL FOR DEALERSHIPS By Dennen Gamradt, Eide Bailly, LLP M ost dealerships have team members who are responsible for accounting and finance. These individuals might be trained in the position or hired for their expertise. Because managing a dealership is complex, it is easy for dealership owners and managers to entrust these individuals with their tasks without strict internal controls, regular check-ins or process and technology assessments. Today’s auto dealers are also managing disruption driven by the COVID-19 pandemic and resulting digital acceleration. They are forced to consider how they might change their business models, which adds a significant load to their long list of responsibilities. As you can imagine, this leaves a lot of room for error, inefficiency and even fraud. One of the best defenses against these risks is good cash management, which includes monthly bank reconciliation to confirm your cash is accurate. Conducting a dealership diagnostic check, along with consistent reconciliation, can help maximize efficiencies and profitability. Why Good Cash Management is Critical for Dealerships Careful cash management and monthly reconciliation are essential for dealerships to stay viable and pursue business- building initiatives. Understanding your actual cash flow and current cash status helps you identify and avoid risks, find opportunities to nurture and improve your cash flow, and make well-informed financial decisions. Consider, for instance, that a team member might be entering numbers incorrectly without realizing it, giving CONTINUED ON PAGE 44