Contract in Transit benchmark

[helpers1]

I was just browsing through the "free stuff" under the Car Dealer Insider section, and came across the "Dealership Benchmarks".

The one item that really caught my eye was the "contracts in transit" benchmark. Realizing there is no way I should use the month-end contract-in-transit balance (over 20% of the monthly finance contracts are turned in the last two days of the month here), I chose a cutoff of the middle of the month - counting back 25 business days from the 15th.

Still - I'm almost twice what the benchmark said I should be. I started looking at the computation - 3 days of total month's bank sales.

Granted, ONE of my primary banks will pay same day, and a few others will pay within 2 -3 days of receiving the contract, but when the sales dept doesn't get the contract to the office for 3 days to begin with, that's up to 6 days - I haven't even addressed the sub-prime deals yet....We do A LOT of spot-selling here, which results in taking longer to get the deal to accounting - if you make the customer come back to pick up their vehicle once it's been approved, you run a greater risk of losing the sale altogether.

I realize a benchmark is something to strive for, but shouldn't it be at least attainable? Any other thoughts out there?

[texaslp]

I wouldn't really worry about that benchmark. If your dealer is comfortable with your processes(spot-deliveries, not turning in deals timely etc), then there isn't much you can do. You can only control what happens once the completed deal hits accounting, assuming all stips are met etc. and as you said, sub-prime lenders take longer to pay.

My personal goals are l) contracts go out same day or next once deal is turned in to acctg 2) follow up phone calls if not paid in one week 3) twice weekly report to sls, fi and dealer showing all outstanding and comments if something is missing.

[helpers1]

I basically have the same standards - I'm just curious as to how many controllers find this attainable - what is your dealer's standard for getting deals into the office?