Check for dealer trade transactions that need attention first thing in the morning. Dealer trades hold up cash.
Paying off sold units:
Time to have some fun, check to see what was sold the prior day.
Utilizing the sales log and the Data management system make a list of what was sold the previous day or weekend.
Following the dealership’s guidelines payoff sold units accordingly. (I like the idea of pulling inventory packets for the title clerk to be sure we have a jacket for every unit sold).
Log all units sold from the prior day onto the accounting log if utilizing Excel for reconciling vehicles sold (using a log in the Data Management System or worksheet in Excel, update it accordingly daily).
Floor planning vehicles in inventory not sold
Floor planning vehicles is another way to keep cash flowing through the bank account.
What is the policy for used units that are not sold are they floor planned (borrowing against the vehicles)?
What is the policy for new units that are purchased or dealer traded in, but not sold, can they be floor planned, check the organization]s policy.
What paperwork is needed to floor plan a new vehicle?
What paperwork is needed to floor plan a used vehicle?
Is there a mileage or age limit on used vehicles?
How long can the vehicle stay on the floor plan?
What is a principal payment?
Are there principal payments or curtailments on the inventory to reduce the floorplan balance?
What is a floorplan statement?
I’m here to help
Great time to see if the Contract or Title Clerk needs help with getting contracts processed and to the bank.
Completing dealer trades
Dealer trade is the exchange of a vehicle with a manufacturers statement of origin, usually not delivered previously as a retail sold unit from one dealer to another, it can happen as a one-way trade or a two-way trade when two vehicles are involved in the exchange of vehicles. A dealer trade is one of those transactions which can drain cash if a process is not in place.
When the vehicle is traded to another dealer, the accounting office pays off the bank, in most cases depending on the floorplan source it may be considered a cash transaction which depending on the floorplan source may have different requirements.
If the sales department conducted a one-way trade, it becomes a waiting game to get the cash back; if it’s a two trade, the Accounting Office has to pay the other dealer for the incoming unit, cash out. If the incoming unit is sold as a retail unit, incoming monies are on hold if payment is a retail installment contract or vehicle sight draft. The best possibility would be if the customer paid by check, cashier’s check or cash.
The process to complete dealer trades will vary by organization, check with the organizations guidelines for more help.
Wholesale transactions another area that impacts cash is the sale of wholesale units (vehicles that cannot be sold as retail for one reason or another, excessive miles, wear/tear) to the Auction or possibly a Sister store. Wholesale sales require attention before and after the sale. Upon receipt of the sale transaction from the sales department, are all the necessary documents available to send the completed title/lien release for payment? The clock is ticking, if the dealership has a title department, can the Title Clerk get started on the missing documents needed? Can the sales department send a list of potential inventory that could be sold for title/lien release check?
Booking car deals – Retail deals
Checkpoint, the first step in booking all car deals, is to confirm all monies are received.
Utilizing the Data Management System print copies of all receipts or the accounting ledger as a means of confirmation of received funds.
The second step is to verify rebates claimed on the deal against the rebate paperwork submitted with each agreement.
Checkpoint, rebate paperwork should be complete, signed by dealer representative and the customer.
Checkpoint, the best part of the day, is to book car deals or sales transaction (wholesale, dealer trade and retail) as submitted to the accounting office (tip: apply a 24-hour rule to post all deals upon receipt).
Pull from the car jacket:
Compare the vehicle identification number on the sale packet to the title/manufacturer’s statement of origin.
A copy of the dealership’s code sheet.
The purchase agreement, sales contract.
(if applicable) and finance recap.
Due bill or we owe.
I’m a fan of cleaning up the gross screen in the finance log-on depends on the Data Management System,
Confirm the sales manager information.
Salesperson information and commission.
The amount financed is correct?
Verify the sales amount including the down payment amount.
Verify the finance source.
If the transaction is not already in booked status; this is a time to turn it to booked status.
Once the sales transaction is in booked status, time to verify accounting against the sales and finance department:
Time to reconcile the deal.
Verify the sales gross.
Verify the finance reserve gross.
Verify the aftermarket gross. Set up an allowance for the rebate, all trade-ins, and packs as it applies to the organization’s process.
Create the sales voucher in Excel or using the Data management system.
Record the sales transaction in the Data management system, update the accounting log (if it applies) notating variances or adjustments for each sales transaction on the log. (Best Practice: Consider sending explanations on differences over $50.00 to the sales manager for confirmation. The sales manager should adjust his log at that time).
Once the deal is reconciled and finalized, follow the organization’s process for completing the file.
Preparing sales commission sheets for the sales department is another step in the daily process. When recording each sales transaction, confirm the commission amount payable to the salesperson is correct. Do you have payment plans in hand for sales people or the commission guideline for reference?
Cleaning assigned schedules including inventory, and due bill schedules can be part of the daily or weekly process, it becomes a matter of preference and time constraints.
Utilize a general journal voucher for all entries recorded outside of the billing process.
Note all adjustments for the front and back end on the accounting log, send variances to the sales and finance department for reference.