CUSTOMER PAY SPLIT OR PARTS TRANSFER

[MIKE1010]

Can anybody tell me if you split all customer pay parts with service or are there certain ones that you don't. Is there a guideline in P and P somewhere? We are on R and R. We have different sources assigned to parts that don't transfer. The reason why I ask is service manager was questioning his statement and we found that BG products was in a source that does not transfer. These sources were set up by a previous parts manager. Also does your DP look at gross profit for parts dept before or after the transfer.

[TimK]

everything splits except warranty here

[JMShocker2010]

Parts Dept. Keeps all Warranty and Internal, and the sublet goes to the dept that it had to do with. Everything else splits.

[Mike Nicholes]

the 'splitting' of profit from parts between parts and service is an old 'antique' of a process, used by two major manufacturers in the US marketplace. It began in about 1965 and has been a 'misdirected' application of profits since then. Some dealerships us this split because 'they are used to it'; it is NOT the standard in dealership accounting. The parts department may have no control over the split, but when parts measures profit you must use the figure BEFORE the split, then if the dealer or accountant wants to split that number that is entirely up to them.

Your profit in parts is accurately calculated BEFORE any transfer, not after.

Mike Nicholes

[JMShocker2010]

YOU HAVE NO IDEA HOW MUCH I WOULD LIKE TO DO AWAY WITH IT! we have a body shop also, so just about everytime I turn around, I get nailed for one thing or another.

[mdishong]

I'll see your GM accounting practice & raise you Honda & Hyundai!

Since we were org. a GM dealership, my Honda & Hyundai parts get lumped into GM accounting. So any of these parts ALSO get split between parts & service.

I HATE IT

Warranty, Internal, Oil & Tires all do NOT get split!

[Richard]

the 'splitting' of profit from parts between parts and service is an old 'antique' of a process, used by two major manufacturers in the US marketplace. It began in about 1965 and has been a 'misdirected' application of profits since then. Some dealerships us this split because 'they are used to it'; it is NOT the standard in dealership accounting. The parts department may have no control over the split, but when parts measures profit you must use the figure BEFORE the split, then if the dealer or accountant wants to split that number that is entirely up to them.

Your profit in parts is accurately calculated BEFORE any transfer, not after.

Mike Nicholes

too bad I get paid off the number AFTER gifting of MY profit to service...

[Mike Nicholes]

Only two manufacturers mandate the split, GM and Ford, However, some dealers and dealer groups use a standard statement with the organization that mimic the GM and ford allocation of part of the parts department profit to Service. the thing started in 1965, with no defense for the parts department. Whether or not the split is made, the parts department should calculate and track their net profit, BEFORE, the split or allocation to Service; that is what you really did. If the dealer then decides to give the balance of the parts profits to service, or Good Will, for that matter, they will do so. What you do in parts is BEFORE the split, the transfer is an accounting function and not a function of efficiency or profit

Mike Nicholes

[greenthumb-38]

...the transfer is an accounting function and not a function of efficiency or profit.

Mike Nicholes

I am committing this to memory.... thanks Mike !!

~gt gets paid _after_ the split.