What comes to mind when asked about your dealership's Daily Operating Control (DOC) report? Inaccurate? Irrelevant? You are not alone in your sentiments, but the DOC can and should allow you to keep a finger on the pulse of your business operation.
What the DOC can do for your dealership
The DOC provides information you can use to steer your business in the right direction to meet your financial goals. A relevant DOC offers these benefits:
- Allows you to quickly identify problem areas and trends and avoid month-end surprises
- Provides a financial snapshot of each department at any point during the month, acting as a barometer of the dealership's health
- Permits management to analyze the gross profits of each department—new, used, service, parts and body—along with their related selling, operating and fixed expenses, much like monthly dealer financial statements except in a more timely manner
- Summarizes each department’s net income and totaling dealership gross profit or loss
What's the problem?
The DOC can only serve as a useful tool if the information is accurate and up-to-date, but sometimes this does not happen, for a number of reasons:
- Daily deals are not finalized or capped in either the F&I or the accounting departments. As a result, these deals are not closed and entered into the Dealer Management System (DMS) expediently
- The service department has too many open repair orders and they never seem to get caught up during the month
- The accounting staff fails to enter expenses on a daily basis
If your dealership suffers from these problems, consider the reasons: Is your office under-staffed? Do you need to implement new procedures and have the office manager delegate some responsibilities?
What's the solution?
Once you identify the reasons accounts are left open and items are not recorded you can address them and implement a procedure to ensure that accurate data is posted daily into the DMS.
Most dealers who possess an accurate DOC report require that all deals be finalized and capped in accounting by noon of the next day. DOC reports can be processed over the lunch hour and delivered to department managers by 1 p.m.
An office manager or controller usually oversees the DOC and documentation process. It requires time and commitment, but everyone in your dealership should be on board so you can generate an accurate DOC. Having a reliable DOC saves you time, money and headaches in the long run.
If you need assistance implementing a procedure for producing an accurate DOC, please call Schenck for guidance in making this a reality. We will help you establish a system so you can actually use your DOC to steer your dealership to great success.
Jason Kiehnau, CPA, is a manager and co-leader of Schenck’s Dealership Industry team. Jake has more than 10 years of public accounting experience, and also previously served as general manager/controller for an import and domestic auto dealership.