CP Parts Gross Transfer

[Fixed Ops Mgr]

I just wanted to inquire if anyone out there has done away with using the parts gross transfer at their dealership? Has anyone
changed the split away from 50/50 to another percentage that is more accurate and fair to the parts dept?

I have been told this is an old calculation that was originally set up in GM accounting and it can be changed based on
the discretion of the dealership.

[Zep33]

There are many dealerships that don't use it and not all manufacturers used it to begin with.

There are a few threads in here about it. Maybe search gross transfer.

Always hated that with GM. Toyota doesn't use it

[greenthumb-38]

we have had various splits over the years, but currently at 50/50 for CP only, excludes GOG and TIRES.

this is a GM only accounting adjustment.

~ gt does NOT like it

[2longinparts]

We dropped it about 10 years ago. Created way too much animosity.

[Zep33]

we have had various splits over the years, but currently at 50/50 for CP only, excludes GOG and TIRES.

this is a GM only accounting adjustment.

~ gt does NOT like it

I thought Ford and maybe someone else did it too for a while

[partsguy99]

Way back when Parts Managers actually MANAGED a parts inventory (think Target and PRO parts) I was taught that every department needed to pull their own weight make a profit. Why should one department need to prop up the profits of another. We've never done it here. It's done on the Operating Report
for the Generals sake.

[Richard]

I hate it. I have a Fixed Ops Director with a severe service dept bias. I was out yesterday, and he created a new discount. See my complaint to the Controller.

6200022. Part sale was $194.75 Gross profit on part was $112.96, service takes 50% at transfer or $56.48, leaving parts with $56.48 profit, until the discount, which parts gets hits for $53, leaving a net profit of $3.48. Not sure who created this discount, but it sure isn’t well thought through.

Controller says he can do whatever he wants.

[partsguy99]

I hate it. I have a Fixed Ops Director with a severe service dept bias. I was out yesterday, and he created a new discount. See my complaint to the Controller.

6200022. Part sale was $194.75 Gross profit on part was $112.96, service takes 50% at transfer or $56.48, leaving parts with $56.48 profit, until the discount, which parts gets hits for $53, leaving a net profit of $3.48. Not sure who created this discount, but it sure isn’t well thought through.

Controller says he can do whatever he wants.

Sooo, how profitable is the service dept. really ?!?!

[TimK]

I hate it. I have a Fixed Ops Director with a severe service dept bias. I was out yesterday, and he created a new discount. See my complaint to the Controller.

6200022. Part sale was $194.75 Gross profit on part was $112.96, service takes 50% at transfer or $56.48, leaving parts with $56.48 profit, until the discount, which parts gets hits for $53, leaving a net profit of $3.48. Not sure who created this discount, but it sure isn’t well thought through.

Controller says he can do whatever he wants.

How much was service hit for on the discount?

[Fixed Ops Mgr]

Way back when Parts Managers actually MANAGED a parts inventory (think Target and PRO parts) I was taught that every department needed to pull their own weight make a profit. Why should one department need to prop up the profits of another. We've never done it here. It's done on the Operating Report
for the Generals sake.

The accounting entry makes no sense to me and it skews the data on the financial statement. All it does is show the service dept being more
profitable than the parts dept. The service dept sells the parts on customer pay ro's just like a salesman sells cars for the dealership but
the sales dept does not transfer 50% of the sales gross profit to the salesman. Why should a parts dept transfer 50% of gross profit to the
service dept for selling the customer parts on a ro?