Small Dealer Inventory

[pushit7]

Good morning managers.
This is the first time we did inventory since 2018 when I took over last manager who just left.
It was really bad dealing with obsoleted old junk parts. It was way off like more than $30K

After 5 years, we did some clean up doing whatever we can to get rid of those pile of junk.
My partner and I can't figure out what we did wrong. Is it anything upstairs (accountant) doing wrong?
We're still off by almost $8K and ate tires source looks awful. We marked every invoice to where they supposed to go (source)
This is the number we have now. Do I need to separated/add more source to make it easier?
Any awesome managers here, please help me out. Thank you

[Gerry Laughlin]

Couple of questions, how do you account for LIFO? Our corporate controller accounts for it each month. Second, what manufacturer are you? Is your price tape putting the tires in your tire source, or is that something you and your counter guys are handling? If you are accounting for LIFO monthly, I would say that if you were doing inventories yearly, you are off about $1500 per year, which in my book is a win.
Gerry

[pushit7]

Couple of questions, how do you account for LIFO? Our corporate controller accounts for it each month. Second, what manufacturer are you? Is your price tape putting the tires in your tire source, or is that something you and your counter guys are handling? If you are accounting for LIFO monthly, I would say that if you were doing inventories yearly, you are off about $1500 per year, which in my book is a win.
Gerry

Thanks for the reply... To answer your question
First one... I have no idea (I'm still new on this. Imagine from a regulator counter guy promoted to a manager with no background experience and no guidance)
Second, we work for GM
Third, I'm not sure with the question. I apologized.
Based on what you wrote, we haven't done inventory for 5 years, is that where we're off $1500?

I really appreciate it Gerry. Thank you again

[Gerry Laughlin]

My points are: If you were doing inventory each year you theoretically would have had a $1500 shortage each year, which would be within acceptable limits. Secondly, what system are you on? Since your tires are off so badly, I would suspect that your tires are coming into your inventory in account 24300, but not being relieved properly. My suspicion is that the tires that are not currently on your inventory are 1) added to the system to the default source (24200), 2) ordered by your tire counterman, 3) then sold on the repair order 3) later the tires are receipted, the source is changed to whatever your tire source is that relieves 24300, and it is sent up to the office. This chain of events would cause exactly what you have going on. You need to make sure that they are in your "tire source" BEFORE they are sold. In CDK the way to do that is to make sure PMU is set up to add them to the correct source the minute they are added to the system (source 8 is what the price tape wants to put them to).
As far as LIFO goes, when you buy a part for $100 dollars, then run the price tape update, and the part goes up to $110 you would end up with $10 in LIFO adjustment. This $10 can hide issues in your store if you don't account for it. Our controller takes the amount of the LIFO adjustment each month and adjusts our inventory for the variance.
It's kind of important to know how your store handles it (by the way, if your store handles it differently, it's not necessarily right or wrong, just different).
Thanks,
Gerry

[pushit7]

My points are: If you were doing inventory each year you theoretically would have had a $1500 shortage each year, which would be within acceptable limits. Secondly, what system are you on? Since your tires are off so badly, I would suspect that your tires are coming into your inventory in account 24300, but not being relieved properly. My suspicion is that the tires that are not currently on your inventory are 1) added to the system to the default source (24200), 2) ordered by your tire counterman, 3) then sold on the repair order 3) later the tires are receipted, the source is changed to whatever your tire source is that relieves 24300, and it is sent up to the office. This chain of events would cause exactly what you have going on. You need to make sure that they are in your "tire source" BEFORE they are sold. In CDK the way to do that is to make sure PMU is set up to add them to the correct source the minute they are added to the system (source 8 is what the price tape wants to put them to).
As far as LIFO goes, when you buy a part for $100 dollars, then run the price tape update, and the part goes up to $110 you would end up with $10 in LIFO adjustment. This $10 can hide issues in your store if you don't account for it. Our controller takes the amount of the LIFO adjustment each month and adjusts our inventory for the variance.
It's kind of important to know how your store handles it (by the way, if your store handles it differently, it's not necessarily right or wrong, just different).
Thanks,
Gerry

We currently using CDK
I think I know what you're talking about now. I take that in the last 5 years, each year we've lost $1500. Not sure what's the limit but I do believe the last time inventory it was really bad.
Our tires source supposed to be in 243 and I do agree that we (my part-counters and I) could make mistake when we receive them.
1. Usually if the tires aren't not in our system, we did not add them. We just billed them
2. When the tires are in our system, most of the time, we bill the tires before we receive them. Definitely the mistake we take
3. Those tire which aren't in our system, we just mark down 24200 on the paper and send it to the office.
4. I never even know there's PMU. I should check this out Monday and figure it out.
5. LIFO ... does it have anything to do with our menu RAD? (Appreciation/Depreciation)

One of the question, superseded parts. Will these take effect too? Because prior to inventory, we found out so many old part number we have change to new number. So I did the supersession on those.
I'll let you know how this end in mid of the week.
This really understands me a lot. Man I wish I could just contact you about all these.
Millions thanks Gerry!!

[Gerry Laughlin]

Couple of things: Do you have your system allowing quantities to go negative? You will receive a lot of varying opinions on this. I myself allow it, but it comes down to your particular store. Anytime the vehicle is still in the store, we sell it at the time the part is approved (if we don't have the part in stock we go negative, when the part is receipted it takes us to zero O.H.), but like I say there are pro's and cons to this. I add everything to the inventory that has a GM part number (especially tires) at time of quote. So, if your PMU was set up correctly your tires would be going into a source ending in 8(I use source 8) which would be chained to sale account 49000. The cost of sale account is 69000 which should be set up to relieve account 24300 (chained). So, here goes:
Tech requests a quote on a tire that you don't stock. You go to GM Tire Central, lookup, quote and ADD IT TO THE SYSTEM (if PMU is correct the part number is added to source "8" at this time) but with zero on hand. Eventually the SA sells the tires, so you sell them at that time (going negative). You order the tires, they come in. Once you receipt them your inventory goes to zero (where it belongs). Next day you are billed by GM for the tires, and you follow the suggestion to put them into inventory account 24300. Boom--everything equals out in your department and in the office.
Other notes:
Be careful in PMU, you can do more damage than good, but be careful calling CDK about it, they know less than you. If you send me your source setups (descriptions) I can let you know what the field map in PMU should look like.
The RAD report is LIFO.
Let me know your source setups.
Thanks,
Gerry

PS: Believe it or not in the old days CDK would actually send people out to help you get these types of things sorted out. Nowadays I feel blessed if the agent speaks English let alone is competent.

[Gerry Laughlin]

I didn't make it clear that the reason I use source 8, is because if you look on the CDK GM(GK) Facts Sheet you will see that the price tape is set to put any part that GM sees as a tire in source "8". Similarly, accessories are placed by the price tape into source "5", which when set up properly can make your life a lot easier.
Gerry

[pushit7]

Couple of things: Do you have your system allowing quantities to go negative? You will receive a lot of varying opinions on this. I myself allow it, but it comes down to your particular store. Anytime the vehicle is still in the store, we sell it at the time the part is approved (if we don't have the part in stock we go negative, when the part is receipted it takes us to zero O.H.), but like I say there are pro's and cons to this. I add everything to the inventory that has a GM part number (especially tires) at time of quote. So, if your PMU was set up correctly your tires would be going into a source ending in 8(I use source 8) which would be chained to sale account 49000. The cost of sale account is 69000 which should be set up to relieve account 24300 (chained). So, here goes:
Tech requests a quote on a tire that you don't stock. You go to GM Tire Central, lookup, quote and ADD IT TO THE SYSTEM (if PMU is correct the part number is added to source "8" at this time) but with zero on hand. Eventually the SA sells the tires, so you sell them at that time (going negative). You order the tires, they come in. Once you receipt them your inventory goes to zero (where it belongs). Next day you are billed by GM for the tires, and you follow the suggestion to put them into inventory account 24300. Boom--everything equals out in your department and in the office.
Other notes:
Be careful in PMU, you can do more damage than good, but be careful calling CDK about it, they know less than you. If you send me your source setups (descriptions) I can let you know what the field map in PMU should look like.
The RAD report is LIFO.
Let me know your source setups.
Thanks,
Gerry

PS: Believe it or not in the old days CDK would actually send people out to help you get these types of things sorted out. Nowadays I feel blessed if the agent speaks English let alone is competent.

I don't think our system allowed us to do negative quantities. For tires, CVO accessories, after market, something we have to picked up from other dealers, yes we billed them out as negative quantities. But if something we have to order from PDC, we don't have that option.
We are definitely not doing the right thing with tires because it probably has something to do with PMU
I print out the source setups. It doesn't set up like it supposed to?

Thanks for all the answers Gerry

[RLWOLF]

If you are a GM dealer on CDK, the first thing I would suggest is to move all your GM parts to Source 100, then run a price update.
This will re-source all your items to the GM recommended sources.
Then run PHR and choose PH7
This will give you a complete list of sources, number of part#'s and total dollar values for each source.
Personally, I would put my tires in Acct#24200 as well.

(Run PHR and PH7 before you move any sources to get a listing of your inventory sources as they are now)
Then after you move everything and run your price update, you can compare the before and after sources.

Also, review your source controls in PMU. It's highly possible some individual fields within a source are not set to update.


Good Luck

[pushit7]

If you are a GM dealer on CDK, the first thing I would suggest is to move all your GM parts to Source 100, then run a price update.
This will re-source all your items to the GM recommended sources.
Then run PHR and choose PH7
This will give you a complete list of sources, number of part#'s and total dollar values for each source.
Personally, I would put my tires in Acct#24200 as well.

(Run PHR and PH7 before you move any sources to get a listing of your inventory sources as they are now)
Then after you move everything and run your price update, you can compare the before and after sources.

Also, review your source controls in PMU. It's highly possible some individual fields within a source are not set to update.


Good Luck

I see what you mean.
It looks like everytime we order part and put in the system, all goes to 106. So if you change all source to 100, it will reset again at the beginning of the month, no?
This is the complete source values we have