10 UTAH AUTO DEALER Unlocking the Value IN FACTORY FINANCIAL STATEMENTS BY GLEN MCMAHON, CPA, CMA, EIDE BAILLY Dealerships juggle multiple moving pieces to ensure daily success. From fixed ops to variable ops and everywhere in between, dealership owners have much to plan, track and navigate daily. Successful dealers understand that big-picture review is critical for improved operations, growth and profitability. They know that when all its parts are operating at peak performance, the competitive edge is theirs. But where do you start? You begin by reviewing your factory financial statement. This amazing tool is loaded with information that, when properly utilized, can help a dealer closely monitor each of its departments. Many operators become so entrenched in day-to-day happenings that they don’t take time to step back and consider crucial business benchmarks and KPIs that can help improve operations and profitability. Besides lack of time or focus, some dealers have simply never been taught to read the factory financial statement effectively, so they stay in the rut of the status quo. That was a symptom recognized by a successful Rocky Mountain dealership that called upon Eide Bailly to bring a fresh set of eyes to their accounting department with a Dealership Diagnostic Check. Just like a dealer offers a vehicle diagnostic check to ensure their customers’ vehicles are working at peak performance, Eide Bailly’s multipoint financial inspection does the same for dealerships. Successful dealers understand that bigpicture review is critical for improved operations, growth and profitability. What We Found: Employee Classifications and Overtime In performing a diagnostic review for this dealership, we recognized that “Other Salaries & Wages” expenses per the factory financial statement were out of line with industry standards. As we worked with the dealer to gain more insight into this concern, we discovered that the cause of the higher expenses was primarily the result of employee classifications and overtime.
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