DEPARTMENT P&L

[a_garrett82]

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

[Richard]

GM dealer? Tell the SVC manager happy birthday, it's a gift of antique accounting via GM

[CMayne]

GM dealer? Tell the SVC manager happy birthday, it's a gift of antique accounting via GM

That would be a BIG bingo!!!!
Acording to GM this is adjustable, but I have never been able to get an Office Manager to figure out how. As far as I am concerned "Gross Transfer" is way out of line at 50%. They may be intitled to some but not 50%. Fortunately my DP looks at line 58, "dept profit or loss", anything the DP wants to do with it after that is his business. Look down below line 58 and you will also see line 60, "proration" which is a chunk of money the dealership decides to apply to the "whatever" account. Bottom line is where Most DP's want to see numbers in the "black" after all is said and done. Depending on your "local" competition this will give you an idea of what kind of pricing matrix you may want to use to adjust it to a "black" figure. "Used to be" that you could get enough discounts and allowances (687) out of GM and AC/Delco that you didn't have to worry about it. Add in the "profit loss" from the "bump" program and the rape job from GM and you have your work cut out for you. Good luck!

[coleracing77]

Start with expenses. Look for excessive freight, technologies and services. If you don't use it weekly or daily cut it. Make sure you aren't paying for any shop services such as Mitchell or all data. They tried to sneak that into my dept recently and I was on it like a hawk. If I give them a parts transfer they can pay it! Ask for several months of statements to build your self a pattern so you will know when an account is out of line from the norm. Keep a sharp eye on policy work. I have seen where service writers will bill parts for a rental because the part is a special order. ABSOUTLY INSIST that ALL parts policy work must be signed off by you or it gets charged back to service. This has saved me thousands!

[cville1987]

Yes Service gets half of your CP profit only, not warranty and internal. As I understand it. I would look at if you have too many employees, otherwise you're hands are pretty tied. Try to get as many discounts as you can, and find out if service is also charging half their discounts to parts. In my opinion, if you get half my gross, you don't get to split the discounts with me as well. Bottom line though is you can't control how the office divides up expenses among departments. If you are getting paid off of net in any way you better get it changed ASAP.

[Gerry Laughlin]

Quote "ABSOUTLY INSIST that ALL parts policy work must be signed off by you or it gets charged back to service. This has saved me thousands!" This is probably some of the best advice on here, but it should apply to all expenses. You need to have the office manager on board as far as nothing gets charged to your department without your approval.

[partking]

And to carry Gerry's post one step further...NOTHING goes into parts inventory withour your approval. Hoo boy I've seen some things. In one store the used car manager bought some junk cars to part out for recon of his used cars. Guess where the cost of the clunkers ended up? You got it .. parts inventory.

[TimK]

find out if service is also charging half their discounts to parts. In my opinion, if you get half my gross, you don't get to split the discounts with me as well.

That was a biggie here; the Service dept was stroking us hard with a 50/50 discount split when I took over.

It should be around 75/25 or 80/20, and used sparingly. That's all profit they're giving away.

[GM2FOCUS]

And to carry Gerry's post one step further...NOTHING goes into parts inventory withour your approval. Hoo boy I've seen some things. In one store the used car manager bought some junk cars to part out for recon of his used cars. Guess where the cost of the clunkers ended up? You got it .. parts inventory.

Big hot air advertising ballon hit mine at one dealer I worked for. Some of the dealers do it to see if you are watching, I think. Reading thru these posts have given me flashbacks, so glad the kids are grown and I don't have to play GM parts manager anymore. Good Luck guys & gals!

[brparts]

you might want to look at who has access to the parts side of the RO"s. i knew a service manager that was changing the prices on parts and adding it to labor after the cashier was done taking the payment. nobody in service should have any parts access. check with your system admin person to see what level service personal have.