Auto Dealer Monthly, May 2015

fi rming up your policies and procedures you can protect both Harlene Doane is COO of DealerStrong and co organizer of the annual Industry Summit She is the former editor of Auto Dealer Monthly and has expertise in dealership accounting and operations HDoane@ AutoDealerMonthly com 100 Guaranteed Exclusive Organic Leads Month to Month Commitment No Sign Up Fees 100 Exclusive Lists Custom Credit Scores Bankruptcy Mailers special finance leads automotive direct mail All Direct Mail programs include our free call center We set your appointments and do the direct mail follow up 100 Turnkey for Dealers We make the calls We set the appointments We do the follow up Free Inventory Listing triggercomplete next generation lead service new used car leads Click to Call You No Bad Phones 100 Guaranteed Exclusive MAY 2015 AUTODEALERMONTHLY COM 23 created two pickpockets the employee who received the service and the one who gave it away To avoid this issue you must create and enforce a policy that covers parts service and even vehicle purchases 6 CAN YOUR PARTS BE RETURNED FOR CASH If your shop orders a non inventoried a k a emergency part and it turns out to be the wrong one what happens Th e right part is then ordered and it may come from a diff erent supplier because the fi rst supplier didnt have it So a runner goes to get the right part and the repair is completed But wait What happens to the wrong part Since its not stocked in inventory its pretty easy for that part to leave the dealership and be returned for cash and that cash just might not make it back to you Make sure all your vendors know that all part returns must be handled by providing credit on your account or a check payable to your dealership Do not allow your employees to accept cash for any parts returns and store your parts in a secure location with very limited access 7 CAN YOUR SALES TEAM AUTHORIZE FREE REPAIRS I have seen dealers with crazy amounts charged to policy because their sales pros were too afraid to ask customers to pay for repairs aft er the sale Others will off er to split the bill or say the dealership will cover it If you arent comfortable with that set fi rm limits on policy authorization in dollar amounts and who can authorize them I suggest you limit authorizations to sales management and make them accountable through their compensation plan Another reason policy gets out of control is when the sales team fails to set up a We Owe at the time of sale because they dont want the gross deduction Th ey hope the customer will just forget about the item in question Th ey dont and then the sales department authorizes the service aft er the sale in the name of customer satisfaction Take a look at last months sales policy account and compare the charges to that months sales How many of them should have been set up as We Owes and deducted from gross profi t up front I suggest a We Owe on every deal including those where nothing is owed and having the customer sign it It certainly helps aft er the sale when the customer returns to the store You wouldnt want a pickpocket rummaging through your pockets so why let your employees dip into your profi ts By