Personnel % of Gross Profit

[CADDYPARTSGUY]

How should one calculate the total monthly personnel % of Gross Profit. I have recently taken over at a small/medium sized dealership and the way they calculate here is to take parts dept gross profit then minus out the parts transfer to service and b/s then use the remaining gross divided into the total personnel amount for the month. This makes the percentage of payroll in the 80% range. (I have always taken the total gross as my starting point to calculate from. When done this way my percentage runs in the 40-45% range.) Also what do you think about a dealer who does'nt give you access to any accounting jobs but just gives you your monthly numbers when the month is over without showing how these numbers were arrived at and says you lost money again.

[96lt1ss]

"Also what do you think about a dealer who does'nt give you access to any accounting jobs but just gives you your monthly numbers when the month is over without showing how these numbers were arrived at and says you lost money again."

You know exactly what most people think, you're probably paying for more than just the parts department share of the expenses.

An open book policy helps build trust and find potential accounting problems. They may be charging you with expenses that aren't yours without even realizing it simply because that's how it was always done.

If it were me I would work on building their trust that your not interested in how much the dealership profits as a whole but only how the numbers affect you. Try each month to review more than the month before and be careful how you discuss questionable findings.

[scotstrong]

I am at a loss to understand why they would exclude the gross generated on sales to your two most important customers (and probably largest) when it comes to any kind of legitimate financial analysis. This, plus the withholding of financial info that you need to be able to be effective at your job, pretty much shows that the hand writing is on the wall as far as this place being a viable long-term employer. I would be willing to bet that this store has very high turnover (not just in parts). Maybe it is time to seek employment elsewhere.

Scot Strong

[Colin W]

We have 13 GM stores in our group. Every manager sees the financials for their deal and everyone elses. This fosters competition in sales, profitability and expense control. For the group, our total personell expense averages 31.9% of adjusted gross. Individual deals range from 28% - 40%.
Hope this helps answer your questions.