G&A or Z Account

[capsgs]

I know that this account is a part of GM's standard accounting. However, I can't help but think something's wrong with ours. Are any of you GM dealers still using this acct? This is a tough nut to crack!!!!

[GMFXDOPSMGR]

The Z account is for the dealer. Ask him/her what is in there.

[possum]

We use the Z account for expenses that are related to ALL departments, and are pro-rated based on the DP's formula. Example office supplies and building janitorial. Parts and Service pays a percentage of these based on percentage of total store Gross, or square footage or whatever your Owner determines.

[capsgs]

Yes I understand what the acct is for and how it is supposed to work. I just had heard that a lot of GM dealers don't use it anymore. I was just curious as to the validity of that statement.

[texaslp]

I can't imagine not using it. Can you clarify what you mean by you think something is wrong with yours?

[sallen1]

the "cleanest" way is to account for every expense for each department and charge them accordingly. The only thing to put in Z would be owners salary.

If you are having trouble distributing the cost of stuff/people, why are you buying it?

Then your departments "stand on their own", so to speak.

s

[texaslp]

"The only thing to put in Z would be owners salary."

That's ridiculous.

[sallen1]

Ridiculous? Not really.

If there is an expense your dealership incurs it should be to the benefit of one (or more) departments and charged accordingly. If you get in the habit of piling expenses in Z, your individual department's expense structure is not a true picture of what is happening at your store.

If you find you purchase something that benefits all departments, then spread that expense into each department either based on a gross profit ratio, or some other calculation.

Anyway, according to the GM accounting manual:

"G&A expenses should be viewed as the responsibility of the general dealership management. G&A expenses are those which do not directly or indirectly benefit any single department... An example is the salary of the owner who functions as the general manager. Typically G&A expenses are usually minimal in relation to total expenses"

Ask yourself this: since rent/rent eqv. is a basic "general dealership expense" should you put rent solely in G&A?


s

[texaslp]

"If you find you purchase something that benefits all departments, then spread that expense into each department either based on a gross profit ratio, or some other calculation."

That is what the z account does.

[Mike]

From what I've seen, everyone uses a Z or G&A account. The difference is in where you see or don't see the charges.

Some dealerships blend all Z account charges in with all other charges so that they are not readily identifiable unless you pull a schedule of each individual account. On ADP this is done by coding an invoice as 6100 for example.

Other dealerships put only the charges that are specific to a department in the departmental catagory on the statement, then all Z account charges are shown seperately in the G&A column on the statement. Again on ADP this is usually done by coding an invoice as 6109. Using this system at the bottom of the statement (GM) there is line 60 which is where your department gets billed for your percentage of the Z account.
This way you can readily see what charges YOU were directly responsible for vs. what charges you were indirectly responsible for.

Rumor has it that most DP's prefer the charges to blended in so the boat payment is not so obvious to everyone!!