Posted on September 1, 2021 by Travis Peterson
Growing up in the 80s, I loved the A-Team. I thought they were the coolest; even the van was awesome! Ultimately, what made them great as a team was that they worked better together. The “better together” philosophy can easily carry over to a different A-Team: the “Accounting Team.” It simply makes fiscal and operation sense to round up your team and transition to centralized accounting.
Getting your house in order and bringing everything under one roof will help you weather industry ups and downs right now. The coronavirus is still a threat, several manufacturers just announced production interruptions, and no one knows when things will get back to “normal” (if that even exists anymore!).
A hub-spoke system for your accounting team, where the majority of office staff are in one location and each store has one accounting support system, delivers more common sense benefits.
Efficiency and consistency
Nothing makes a controller’s heart happier than a quick and streamlined month-end close. When you are operating locally at every dealership, you are at the discretion of the controller of that store. Working centrally, you can implement the same time-saving processes at each location. Payroll, accounts payable, inventory management; all can be streamlined by removing redundancy.
In addition to time-savings, you gain consistency because everyone is following the same processes. Operational errors, and the risk of something being “swept under the rug,” are both less likely. Centralization helps staff do their jobs better, which improves morale and helps fight employee attrition.
Precise document management
Every stores’ month-end data, reports, and physical documents must be properly stored to meet all regulations and protect you in the event of an audit. A centralized accounting office follows the COLDing process more consistently because employees work together in a more coordinated effort.
Also key to breezing through audits is proper scanning of sales and service documents. Managing entry-level employees at each location to scan can be difficult. Mistakenly piggy-backing documents together, missing items in a deal jacket, or creating unreadable scans can all have a direct impact on your bottom line and the liability of your dealership. Consolidating scanning in one place gives you more control over the process and the peace of mind that a trained professional is safeguarding critical information. Most of this information requires to go through accounting any way (think warranty processing and deal postings); why not take this time to scan it?
Effective vendor management
One of the more difficult things to control as you scale is the hundreds of vendors. Keeping track of each agreement can become basically impossible if you have the autonomy for each local store to have control. Additionally, you can bet that you’ll end up with redundant vendors or inconsistent pricing structures.
Centralizing vendor management gives you more power to negotiate better contract terms, weed-out duplicates, and gives you the data you need to pinpoint and cut loose vendors with lackluster results. Centralization also eliminates the frustration of a store auto-renewing a contract that you’re now stuck with for another year. Every contract in the group passing through the same approval process will lead to improved bottom lines and better protection.
And don’t forget your DMS. Consolidating your general ledger may lead to a substantial reduction in your DMS bill.
Over countless episodes, the A-Team proved they could get more done together than by working alone. That lesson applies to your accounting team. When you centralize accounting in one location, you increase efficiency, accuracy, and save money.