DEPARTMENT P&L

[X476]

Had a friend at a dealer that had a line that said, DDDA (dealers descretion don't ask)

[partking]

DDA is dandy and it's his (her) business, but if folks are commissioned off the bottom line, changing the rules mid-stream is a breach of trust between DP and the affected managers. Little grabs and steals between departments are par for the course and vigilence is always needed. But when it's mostly between parts and service, there's a simple fix I always argue for. When both PM and SM are paid off the bottom line of combined fixed ops, they become best buddies and which column the expense or gross is in, C or D, becomes irrelevant.

[NissanWill]

The absolute must have for you is to code all invoices. If you don't do that, you have no idea where money is being billed. I was catching out controller/Office Manger billing Service Tools, Rentals, and Sublets wrongly to the parts account. The kicker was that she was doing this to our 2421 account, which is my parts account. Imagine if I had let that ride for months, then inventory comes around.

Invoices are your first concern. If you don't code them, you need to have a talk with your GM tomorrow! This is not a request. You can not and should not be held accountable for anything in a dept if you don't have access and control your own expenses. I have saved thousands and thousands of dollars because other peoples ignorance. After a while, nobody will know accounts in that building like you do.

Another thing to watch, in on your GL, keep track of your "uniforms" area. We don't have uniforms at our dealer, we have Nissan Shift Gear, I buy three polos for each employee every 4 months. They can buy as many as they want, but only three are on the house. I have seen so much trying to get passed into our uniform account it isn't even funny. One time I caught them charging a Saftey-Kleen bill for pumping out the oil/water separator and drains to that account. It would have been a automatic $3800 loss off the top!!!

[partsman103]

Just wondering if your department typically runs at a profit from month to month. I am new to the game and from the look of my department we have opperated at a loss for several months. Currently we are splitting 50/50 profit on parts sold thru the shop. Is this normal at other dealerships? Just looking for some ways to right the ship. Thanks

look at page 6 ; line 46 (Mech Cars & LD Trks RO) and check out the percentage. Our goal is for it to be at 40% which in the end will help your gross and bottom line. If the percentages are low then this would indicate a few things such as prices being cut and/or not enough markup. As a rule of thumb, we markup all mechanical parts at Cost x 1.87% (at a minimum) that are billed out on RO's.

Also make sure that no one but you and your Asst Mgr can override the prices on RO's. Our Service Mgr use to be able to change prices until I found out he had access to do so. then i went to our System Admin and had his access removed.

watch "semi-fixed expenses" and find ways to offset any of them.
Example:
We added a $1 minimum delivery fee on each invoice and it is not to exceed $10. (Deliveries outside a 10 Mile Radius pay the higher rate). Just make sure you can provide excellent service and have the parts there in a timely manner. Our Freight account is always in the black.