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Tag Archive: NCM Associates

Kevin Cunningham

From the 20G: Members’ Advice for Getting the Most from Your Meeting

kevin

As a moderator, I’ve had the fortunate pleasure to work with wonderful NCM 20 Group members. I’m always impressed by the great pains they take to prepare for our discussions, and it’s clear to me that their work is the key to getting the best possible outcomes.  So I asked some of the most successful dealers I know to tell me exactly how they get the most from their meeting, and they agreed to let me share their insights in a blog. Please know much of the following article comes directly from their quotes.

Dealer One – Get your management team involved

I typically get my agenda and meeting materials 4-5 weeks prior to the actual meeting, so I have no excuses for not being prepared. To determine what my best opportunities are, I actively review my group composite, circling, highlighting, and making notes. This really keeps me focused throughout the meetings.

After I get my juices going, we get our management team together to review the agenda allowing me to delegate topics for their research and follow up. I like to do this for many reasons; however, most importantly, this lets me and my team know where our opportunities are. Also, when I read the responses from my team, I now am aware of their best thinking. This can—and has— create opportunities to develop people’s talents.

Note from Kevin: On a side note, while talking with our team at the NCM Institute, l learned that is a significantly high percentage of our class attendees don’t even know what their actual responsibilities are! There’s a real chance here for you to validate what you expect from your team and to communicate it in writing, then get them the training they need to meet your goals.

Dealer Two – Create a to-do List

After our follow-up management team meeting, I create my list of what I want to take away from the meeting. I ask myself of this trip’s purpose: “to make another dollar or to save another dollar?”

Dealer Three – Embrace the social aspects

Getting away from the store is vital to my own personal growth, as attending a meeting truly allows me to work “ON” my business instead of just working “IN” my business. During the meeting, I very specifically and clearly articulate what issue I want to get addressed.

Please know that I can and do get as much important feedback from the social events as I do in the meeting rooms. With so many individual agendas—some strategic, some operational—I try to pick out members who are already succeeding in the area I want to improve upon and make sure I get time with them regardless if it is in the meeting room or a group activity.

One more tip:  As so much of our sales are initiated though e-commerce channels, I work to review the websites of my fellow members and local competitors. This gives me an opportunity to compliment members and offer constructive criticism.

Dealer Four – Don’t scare your employees

Note from Kevin: A common thread I have witnessed over my decades with clients is the pages of notes and exuberant enthusiasm members go back to their stores with. So not to scare your team, the following notes from a member are ones I would recommend:

  1. On your first day back from a hectic travel event, try to sit down and get your notes and action plans organized.
  2. It is very important NOT to overwhelm your team with a “Meeting Mania” list of things, ideas, and processes you want implemented a week ago. So pick out the TOP THREE things you learned. Set up a meeting later in the week to discuss these ideas; get your team involved in the implementation or the construction of a new or modified process.
  3. Share all of the Best Ideas presented and collected while attending the meeting. After discussing them, distribute the ideas to your department heads where they best apply.
  4. Review the composite with your team when you get back. Also review it monthly and be as transparent as possible, so your staff knows the metrics you expect them to meet.

My dealers have given you a lot to think about, I realize, so let’s prioritize here. I think the key takeaways here are to know what you want to get from each meeting and make sure you put yourself in the position to get it. Stay focused and open to new ideas while attending your NCM 20 Group meeting. Bring back your ideas and, after a few days, share them with your team and discuss ideas for positive change.

As I am not in your shoes, I realize much of this is easy to say. As such, this is why I contacted your peer dealers to get the truth from those in your shoes. Here’s to great selling!

Learn more about Kevin Cunningham and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting.

Permanent link to this article: http://blog.ncm20.com/2017/01/from-the-20g-members-advice-for-getting-the-most-from-your-meeting/

NCM Associates

New Ideas for New Orleans

Going to New Orleans? With just a week to go, we can’t wait to join you in the Big Easy and to share our exciting new options for your dealership.

Announcing the NCM-Rawls Dealer Executive Program

We’re debuting our newest education option, the NCM-Rawls Dealer Executive Program, at the convention. A joint-venture with The Rawls Group, this 10-month training course is specifically designed for dealers and their successors who want to create and maintain a family legacy. Visit the Rawls Group booth #3937 to talk with Kendall Rawls or the NCM Associates booth #4931 to speak with Brandiss Drummer to learn more. On the operations and expenses front, our Software Solutions team will be on-site to demo LiveAudit®, HealthCheck®, and axcessa®. If you haven’t yet seen these products in action, be sure to book a time to see how these cash flow, expenses, and operations tools can make managing your dealership easier and more efficient.

We’ve also brought back last year’s crowd-pleaser, the Ultimaker 3D printer! When you sign up for a demo or consultation—or stop by the booth—you can pick from our selection of three gifts. The video above shows a time-lapse of their production.

Are you coming to New Orleans? Visit our team at Booth #4931!

Permanent link to this article: http://blog.ncm20.com/2017/01/new-ideas-for-new-orleans/

Alan Ram

How to Be the New England Patriots of the Car Business

Business people at work in their office

It was 2008 when it hit me.

The economy had just begun to hit the skids, and I was leaving a dealership after having done a live meeting. As I walked through the empty showroom, I noticed four managers on shift, sitting in an otherwise vacant tower waiting for salespeople to bring them a deal. There were no customers on the floor and nothing happening outside beyond the huddle of salespeople by the front door, and I realized: A lot of people in our industry that we call managers aren’t necessarily managers. They might be great on the desk—and they’re often strong closers—but they don’t all have management skills. It became clear to me that what these managers do when there are no customers in the showroom is every bit as important as what they do when they have a showroom full of customers.

How did we get to this point as an industry where we have managers

who don’t have good management skills?

It has to do with how someone becomes a manager at a dealership. We tend to take our best salespeople and make them managers. Wouldn’t taking the best salesperson on the floor and making him a manager be the equivalent of taking the best NFL player and making him a coach?

The best players don’t make the best coaches. Take Wayne Gretzky, for example. He was an amazing player and an absolute disaster as a coach. Likewise, the best coaches in NFL history have not come from the best players. The reason is this: Being a great coach is a different skillset than being a great player. Yet, what do we tend to do in the automotive industry? We take our best players off the floor, we hardly train them at all on how to manage, and then we’re surprised when they fail.

The time has come when dealerships actually have to have good management. In today’s industry, it’s not just about desking and closing deals, a manager’s most important functions have to do with preparing the team for game day.

Here are my tips for how managers can begin to master managing.

Strategic duties

A coach is responsible for a team’s overall offensive and defensive strategies. A great manager focuses on offense by honing a culture of business development at his dealership. He educates his staff on how to drive traffic to the showroom, how they can work orphan-owner bases, sold bases, social media and the service drive for repeat and referral business.

A strong manager also focuses on turning defense into offense by making sure he has given his staff the tools to convert inbound phone calls and Internet leads into customers on the showroom.

Practice makes perfect

Just know the playbook doesn’t prepare the team for the game—the best managers practice and drill plays until salespeople become reflexive and command the confidence to deliver in crunch time.

Great managers prioritize practice with their people just as football teams simulate five days a week to prepare for a game. Managers must simulate critical skills such as how to handle the phones, so everyone is practiced in “what” to say and “why” to say it to get customers walking through the front door.

Accountability is key

Finally, the best coaches hold their players accountable. Bill Belichick is an example of an incredible coach who holds accountability as a top priority. Belichick’s history demonstrates this value most memorably when Chad Ochocinco (aka Johnson), a superstar signed from Cincinnati, was cut for not knowing the playbook.

Great managers hold their salespeople accountable; for example, in order to have accountability on inbound sales calls, managers must actually listen to these calls—just as coaches review game film. When salespeople know that they are being listened to and that they will be held accountable for their performance, their effort level naturally rises.

Management must then have clear consequences. If people are not performing, if they fail to meet the standard, they need to know that there will be immediate consequences. For example, if a salesperson repeatedly mishandles calls, a consequence could be him or her losing the privilege of taking sales calls.

What do all great football teams have in common? Great coaches. Teams don’t come together and win games without strong leadership guiding them. In other words, no team will achieve greatness despite poor coaching.

Fortunately, great managers are made and not born. Check out in-person training options through NCM Associates, and discover our online platform, NCM OnDemandAlan Ram’s Management by Fire course offers additional tools for your dealership training needs.

Permanent link to this article: http://blog.ncm20.com/2017/01/how-to-be-the-new-england-patriots-of-the-car-business/

NCM Associates

#AskNCM: Help! I Can’t Meet My Net-to-Gross Goals!

Many managers out there struggle with this issue, says NCM expert Steve Hall. You reach profitability but then encounter problems getting to this more refined metric!

Don’t give up! Steve outlines the conversation you need to have with your boss and the steps you should take to meet this goal.


Have another question for Steve or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/01/askncm-help-i-cant-meet-my-net-to-gross-goals/

Lindsey Quinn

Five BDC Trends to Watch in 2017

Business Team Corporate Organization Meeting Concept

In many cases the first contact customers have with your dealership, the BDC is an important part of your business. We’ve reviewed what our experts have written about BDCs this year and identified five critical trends your dealership should watch in the coming year.

1. Increased focus on internet BDCs and digital selling

With more than 90% of new vehicle shoppers investigating their options online, there’s no question that digital strategies will play a major role in BDCs in 2017.

If you haven’t already formulated a digital strategy for your dealership or are uncertain how to get started with internet sales, I recommend you check out the NCM Institute classes Mastering Internet Sales and How to Lead in the Digital Marketplace. Taught by experts from Kain Automotive, each focuses on specific strategies to get your dealership up to speed and gives your dealership the performance metrics it needs to gauge your success.

Already have a solid digital strategy in place? Then it’s time to refine your efforts. Take a look at Lee Michealson’s recommendations for how to properly merchandize online. Next, run your website through Paul Potratz’s “Drunk Person Shopping Test” to see how it performs.

2. Expansion of service BDCs

Whether or not to have a service BDC keeps coming up in NCM Institute classes and 20 Group meetings. And given the increasing importance of the service department in maintaining customer loyalty and identifying sales opportunities, it’s not surprising that so many NCM clients are interested in investing in one.

Here’s what NCM expert, Steve Hall, had to say about service BDCs in a recent #AskNCM video segment:

3. Even more collaboration between BDC and Sales

There are many BDC models you can choose for your dealership. But if your sales and BDC teams don’t work together well, customers will be confused and frustrated.

Alan Ram recommends that you consider sales/BDC as one unified team. Not only does it help your dealership deliver one consistent message to buyers, but it also improves your credibility as a business. Read the full article for more of Alan’s suggestions.

4. Hiring for a better customer experience

We all know that employee retention in our industry is terrible: In fact, dealerships have plummeted to a three-year low with a dismal 45% retention rate. (Most industries, excluding farm work, hover around 67 percent!) And just one-third of sale consultants manage to survive to their three-year anniversary. That’s why we’ve featured article from our content partner Hireology that focus on how you can recruit and retain the best employees.

One huge trend we’re seeing to correct the retention issue is the push to hire employees who are highly skilled—or at least temperamentally suited—for customer service jobs. As competition grows even fiercer, strong soft skills are what will keep clients coming back to your dealership. This approach is so necessary that Hireology even recommends that you consider customer service skills over technical ability when selecting service advisors!

5. Personalized BDC training

Another growing trend we’re seeing are NCM clients who choose to customize training sessions for their dealerships or 20 Group.

Recently, Group 20B5 worked with their moderator, Mark Shackleford, and our NCMi staff to customize a training course that specifically addressed their needs. Taught by Steve Hall, shown below, the class was a great success. Scott Stevens, General Manager at Gene Stevens Honda, had this to say about his experience: “If you are in need of training for a new or seasoned Service Manager, I would strongly encourage you to enroll in this class. Timely information, real-world scenarios, all presented by people that have lived it, and been very successful at it.”

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The class, Scott explains, was exceptionally rigorous, “I am in an NCM 20 Group; when we meet, I take a lot of notes. I took twice as many notes in this ‘specific department’ training than I take at a normal 20 Group meeting!” And, he added, it was a good value, “I know that my money was well spent because of the lessons learned and the training material that we took home.”

Customized training can be held on-site or at NCM’s headquarters in Kansas City, Mo. (Might I recommend you come when the Chiefs or Royals are in town?) During the session, we can help you address BDC concerns or work with you for training in any department. Just contact the NCM Institute for more details.

There’s no question that the automotive industry is evolving. Have you seen these trends in action or are you noticing other changes? Tell us below.

Permanent link to this article: http://blog.ncm20.com/2017/01/five-bdc-trends-to-watch-in-2017/

Robert Neuman

Are Your Employees Actually Working at Work?

Business people

Five or six times a week, your employees get up in the morning and say to themselves: “I have to go to work today.”  That’s good because you hired workers to produce—or assist in producing—gross in the first place.

Here is the big question, though: Do your work expectations match your employees’ work expectations? You likely want your employees to put in a full day of activity at work; you know, working while at work. On the other hand, your employees may believe that “as long as I am at work, I am working.” Notice the difference?

Gauge productivity

How do you know if you are getting the full work production out of your employees? Be observant.

Compare the numbers produced by your departments against industry production benchmarks: How are you doing? Is one department falling behind? Then, inspect all departments in the dealership, at all time slots, to see if or when there are pockets of idle time or non-productivity.

Create productive employees

If your departments are not producing as they should, it’s time to make sure your employees work at work! First, evaluate your employees. Here are some questions to consider:

  • Are your sales people producing the volume and gross as you would expect a professional sales person to achieve?
  • Is your used vehicle manager producing the inventory turn you need to achieve your return on investment?
  • Does your service department produce the simple key performance indicators, such as gross as a percentage of sales, increasing your effective labor rate and selling more hours per RO?

Once you’ve identified any problems, you need to develop a correction plan. One of the first things I recommend is educating your staff through the NCM Institute, especially if you haven’t yet invested in formal training for your team. If you’ve already taken the time to train your people, there may be some process issues happening—be sure to talk with your NCM 20 Group moderator and 20 Group members about opportunities for improvement. Another option is to meet with one of our consultants, who will review your operations and help draft an action plan.

Is downtime okay?

You may say, “It’s OK,” to have some employees have idle time, as long as they produce to a set production standard or expectation. I agree with that statement to a point. Just make sure that your employees are achieving—or exceeding—industry benchmarks. I recommend you keep an eye on it, though.

Accountability helps everyone

Obviously, everyone must work at what they were hired to do. Let’s make sure we are getting our fair share out of the employees we have hired. Share your expectations with them. Show them the industry benchmarks or standards, train them in the skills they need to achieve these standards and then hold them accountable. Times are getting leaner, and now is not the time to allow employees in your business to not work at work.

Learn more about Robert Neuman and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting

Permanent link to this article: http://blog.ncm20.com/2017/01/are-your-employees-actually-working-at-work/

Paul Faletti

Top Dealers in 2016: Tactics You Need to Know

Man working at computer laptop with the finance report on the screen. Business Research, Economy Statistics

As NCM brings 2016 to a close, I’m excited to share with you some results from a recent research project by TrueCar. I know that you are hungry for data—and we at NCM strive to give you the best franchise and operational data and benchmarks in the business. TrueCar, on the other hand, has substantial insights into the consumer end of things. Realizing the importance of these customer insights, I asked them to research what consumer-focused behaviors helped some dealers outperform their competition.

To answer the question, data analysts at TrueCar examined the aggregated information they’ve collected on automotive dealerships, distilling it into their new report “10 Habits of Highly Successful Dealers.”* The research identified 75 top-performing dealers and set out to understand the key differentiators, sales tactics, and strategies these businesses used to outperform the competition.

In a nutshell, these dealers more directly addressed the pain points of the consumer, in part through their upfront pricing (e.g., transparency), yet still enjoyed close rates that were 2x better than their local competition. Here are some key areas that TrueCar believes set these top dealers apart.

Pricing strategy

Top dealers aren’t successful because they give cars away. In fact, top dealers sell at 93.6% of MSRP—nearly the same rate as the average dealer on TrueCar (93.7%). They achieve this by investing more time in analyzing and adjusting their vehicle pricing to ensure they remain competitive in their markets. TrueCar found that the high-performing dealers are 1.5x more likely to evaluate their pricing each month, avoiding the trap of “set it and forget it” pricing.

top-performing-dealers

To get more details on what differentiates top performing dealers, download the “10 Habits of Highly Successful Dealers” at www.truecar.com/topdealers.

Better understanding of clients

Top dealers have a solid understanding of car buyers and their buying habits.  For instance, consumers often change their minds on which vehicles they want, slowing down the car buying process: 67% of TrueCar new vehicle buyers purchase a different vehicle (make/model/trim) than they originally configured. These dealers stay ahead of consumers by proactively sending them vehicle alternatives (with pricing), which makes it easier for the customer to land on the right vehicle and increases the dealer’s likelihood of closing the sale. It’s a smart tactic.

Value beyond pricing

A critical component to top dealers’ success is the understanding that in the absence of value, it is only about price. The websites of top performing dealers put great emphasis on “why buy here” messaging and their unique value proposition, whether it’s their superior people or process, community involvement, or ownership benefits. Additionally, TrueCar found that  vehicle deals that included their consumer ownership benefit called “Buyer’s Bonus,” which includes up to $2,000 in Auto Deductible and Repair reimbursements, closed 35% faster than deals without this benefit.

What this all goes to show is that top performing dealers don’t win on price alone. They streamline the online and offline process and remove disconnects that erode credibility. They deliver a superior in-store experience, build trust by offering the consumer validation, and lead with their unique value proposition.

I hope that you’ve enjoyed these new insights from our content partner TrueCar. Look for more data research soon. In the meantime, learn how NCM Associates can assist your dealership implementing changes that drive performance with our 20 Groups, consulting, software and training options.

 

*Top Dealers were studied using various methods including online mystery shops, dealer website reviews, management interviews, in-store observations, customer ratings/reviews, and their strategy/tool usage on the TrueCar program.

Permanent link to this article: http://blog.ncm20.com/2016/12/top-dealers-in-2016-tactics-you-need-to-know/

Adam Robinson

Recruiting Strategies to Attract Millennials

Business people waiting for job interview

By the year 2020, the U.S. workforce will be comprised almost entirely of millennials. What’s more, Generation Y is projected to account for 30 percent of new vehicle sales in 2016, and that number could double next year.

Millennials are much more apt to make a purchase from—or develop brand loyalty to—a company with whom they identify and are even more trusting of purchases from employees who are like them. As a result, companies must now clearly communicate their viewpoints and company culture to potential millennial customers, and perhaps most importantly, employ individuals who connect with that target audience.

Unlike previous generations, millennials care more about fulfillment from their careers and evaluate potential jobs on a number of factors that can cater to this need. To retain these workers, organizations must tailor internal positions and programs to meet the needs of this growing workforce demographic. Also, recruitment strategies must be updated accordingly, to attract the best candidates effectively.

Companies must first identify what millennials want. Here are key traits of what they look for in potential jobs, and how that plays a role in the recruitment process.

What Does Millennial Recruitment Mean for Dealerships?

The dealership model has been in play for decades with little to no change. But these days, millennials want to work for a company that is not only profitable but making a difference in society and providing them with perks that will fit into their personal lives. Millennial needs from employers include:

Income Reliability

Due to the challenges of making large student loan payments and covering basic living expenses, millennials as a demographic are not interested in a commission-based position where pay is unreliable. Rather, they are interested in a base pay plan that gives them the confidence of a guaranteed stream of income. In the auto industry, providing base salary positions in lieu of commission will not only attract better talent but can provide a better customer experience, as well.

Work Flexibility

Fewer millennials today believe in the 9-to-5 workday but prefer instead the flexibility to integrate their personal and professional lives. In an interview with Forbes, Chief Strategy Officer for the Intelligence Group Jamie Gutfreund stated that 88 percent of millennials consider how a potential job will cater to their work-life balance. While it may seem more challenging to provide scheduling flexibility in your dealership, there are a number of options that can work for your organization. Examples include running two shifts—9 a.m. to 3 p.m. and 3 p.m. to 9 p.m.—and perks such as giving every other weekend off.  Some innovative dealerships have even moved to a “four days on, three days off” format where sales associates work four ten-hour workdays.

Clear Job Titles and Descriptions

Job descriptions and position titles must be updated for the millennial audience, highlighting the aspects that will fulfill their wants and needs. Outside of salaries and benefits, millennials are looking for a job with a higher purpose—one that makes them feel fulfilled. As a result, they are interested in companies focused on helping solve problems in society.

In addition, because millennials are still relatively early on in their careers, they want job titles and responsibilities to outline the scope of the work clearly. They are interested in learning as much as they can to advance in their careers and want to know if a company is willing to invest in them through ongoing training and development programs.

Lastly, when placing job openings online, be sure to use concise keywords and descriptors that your target audience will most likely type into search engines when looking for open positions to help better connect you with ideal candidates.

Consistent Communication

In addition to clear communication of job responsibilities, millennials are interested in real-time feedback on the job. Because they appreciate knowing where they stand, along with the opportunity to consistently learn, maintain engagement with them by providing periodic, consistent check-ins as opposed to an annual review.

A Bigger Picture

As mentioned, millennials consider a number of factors from a potential position so as to feel fulfilled, maintain a work-life balance, continue career advancement and align with a company’s values. In exchange for their productivity and devotion, millennials are looking at what a company can offer them not just in monetary compensation, but how a job will fit into their overall life and society.

Once you’ve successfully recruited top talent, it becomes imperative that your dealership retains that employee. This is a particular challenge with the Gen Y employee. In fact, according to a recent 2016 Gallup report, 21 percent of millennials have changed jobs within the past year—more than three times the number of other generations. This turnover is estimated to cost the U.S. economy $30.5 billion annually.

One of the biggest complaints millennials have is a lack of opportunities to move their career paths forward. One explanation for this is a company’s preference to hire externally rather than promote from within. Hiring from within is more cost efficient and provides your millennial employees the chance to further engage with, and invest in, your company.

Tailoring recruitment strategies to attract top talent to your workforce, and providing them with ongoing opportunities for advancement and support, will help ensure your millennial employees will connect with your company and provide loyalty and dedication for years to come.

 

Permanent link to this article: http://blog.ncm20.com/2016/12/recruiting-strategies-to-attract-millennials/

Steve Kain

Why Your Dealership Needs an Ups System

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There are only two categories of dealerships: Those that use an ups system and those that don’t. Today, I’m going to explain why you might want to change your mind if you’re in the latter category.

No ups system = No system at all

Dealerships without an ups system tend to have a manager who “came up” through the ranks in a similar environment. Alternatively, management believes that their sales staff will wait more quickly on customers without a formal system in place. And, in some cases, they view an informal system as a way to reward the go-getters: Their most aggressive salespeople will get the most ups.

The problem with operating without an ups system is that your least productive people—those always standing on the point smoking and joking—end up waiting on the majority of your lot traffic. Meanwhile, your most productive people are following up with unsold prospects, contacting their sold customers and studying product knowledge: meaning that this approach rewards the wrong staff.

Even worse is the fact no system means no accountability. How often do you find yourself asking, “Is there anybody waiting on that customer?” You don’t know because there is no system that defines who actually should be waiting on that client. In addition, the aggressive non-productive salesperson waiting on your customer today will be the same salesperson not following up on that same non-sold customer tomorrow.

Take back control over sales

With an ups system, management maintains control of salesperson activity. A sound system creates a balance between face-to-face time assisting customers on the lot and time to follow up on unsold prospects, staying in contact with customers and asking for referrals, and studying product knowledge materials. Another key advantage is that sales people have no more excuses about not being able to do the things that make a salesperson successful because they don’t have the time—with no more burning through ups all day long, they should have plenty of time to do other work.

If you want to take your dealership to the next level, now is the time to implement a written ups system that will make your sales staff accountable for their time at your dealership. Good luck and great selling!

Learn more about Steve Kain and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting. Don’t forget to check out these exclusive Kain Automotive courses only offered through the NCM Institute: Mastering Internet Sales and How to Lead in the Digital Marketplace.

Permanent link to this article: http://blog.ncm20.com/2016/12/why-your-dealership-needs-an-ups-system/

Ken Runnells

From The 20 Group: How to Efficiently Close Month-End

 Calendar

While most of my 20 Group members close out their month by the third or fourth working day of the month with no problem, it’s clear that there are many dealerships around the country who struggle to get month-end finished in a timely fashion. If your dealership needs a little help getting those numbers in on time, here are my suggestions for streamlining your process.

Set firm deadlines and stick to them

First, the owner/general manager and controller must agree to a month-end “Document Due Deadline” in the office for all car deals, service and parts tickets and expenses. I recommend either noon or by the close of business on the first business day following the last day of the month.  No exceptions!

I think you should make it clear that any new or used car deals, service R.O.’s, part tickets or other items need to be submitted on time or they will be moved to the following month’s business. And that means they won’t be paid commission on them until next month, too! With this policy in place, a strong management team will make sure that as many documents as possible get on the current months’ financial statement.

Develop department-specific processes that work

Now that everyone knows when month-end documentation is due, each manager must create a process to make sure this close-out goes smoothly. You can’t wait until the last minute to start going through a pile of deals, invoices, and expenses and expect to get it done on time!

I recommend that all month-end processes start at least a week before the end of the month in preparation for close-out. The only items submitted the last day of the month should be car deals, CP, warranty, internal repair orders, and parts tickets from the last one or two days of the month.  (This process also greatly enhances your dealerships cash flow during the month.)

Here are some specific suggestions by department:

Sales and F&I. All car deals submitted to the office during the month must be “cashable” and ready for funding; no “bill and returns.” This requirement forces the sales staff and F&I department to collect all needed documentation and signatures required to “cash” the deal before it goes to the office.  Always enforce the rule that no commissions will be paid until the deal is in the office!

Accounting. Your accounting staff also should be assigned specific schedules and reports to reconcile and review in time for the controller to review with them no later than the 25th of each month. While processing this information, have accounting staff note and forward to the dealer/GM for their review any adjustments over $100. (Or other value that you prefer; you pick the number.) Cross training your office staff as much as possible also enables them to help each other and spread the workload when necessary.

Accounts Payable. The accounts payable person should be responsible for making sure all invoices are accounted for when paying the vendors statements during the month.   When checks are signed, any missing invoices should be noted and determined if they were expense-related or inventory-related. A large number of missing expense invoices will obviously negatively impact your bottom line in a future month!

Service. The service manager should be responsible for the work in process report “WIP” and report on any open R.O.’s.  Are all customer vehicles still in dealership’s possession? Are any employee tickets still open?

Make the most out of month-end

Now that you’ve set firm deadlines and outlined a process by which staff should gather information, month-end should run smoother than ever. Before running the financial statement, I suggest your management team should review a 13-month trend of all expenses to be sure no large outlays have been missed and to review any expenses that show an increase or seem out of the ordinary. Also keep in mind that there may be some expenses that need to be accrued due to invoices not received by the third of the month, such as advertising and monthly factory invoices.

As you can see, it takes a team effort to bring it all together at the end of the month. But it is all worth it to have the month closed with accurate numbers and the management team now focused on getting the new month off to a faster start!

If you haven’t looked at NCM axcessa® lately, it is the best software program in the marketplace to drill down into your financial numbers and immediately see opportunities in sales, gross, expenses, and productivity. And our product LiveAudit® gives you instant insights to accounts payable information. Both will make the month-end process less painful!

Learn more about Ken Runnells and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting.

Permanent link to this article: http://blog.ncm20.com/2016/12/from-the-20-group-how-to-efficiently-close-month-end/

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