"Expenditures rise to meet income.”~ C.  Northcote Parkinson

What a profound statement!  Don’t we find when operating any type of business, the more we make, the more we spend?  Years ago, I worked with a General Manager who named him boat, “Just One More Deal” and this was because when a vendor came in to solicit a program or a service, after an enthusiastic presentation, he would sign up with the justification “Just one more deal will cover the cost”.  Well, when we entered a recession in the 80’s and the unit sales fell off, we found ourselves bound in all these contractual agreements and could not get out of the terms.

I am going to open up this discussion on expense control with inviting Doug Austin, President of Performance Management Group to discuss this in a little more detail.  I also invite all the members of Dealer Elite to contribute with a suggestion or a best practice as to how they cut expenses. 

I will start with my first question regarding expense control…Who in your business is responsible for opening the mail??? It really should be the President, Operator, Comptroller, or someone with authority who will question each invoice, each piece of correspondence and ask the questions:  What are we purchasing here?  Do we really need it?  Can we get the same value cheaper from another vendor?  Have we negotiated the price with this vendor lately?  Does it have a purchase order?  Was it authorized?  Are we in a contract with this vendor?  When does the contract come up for renewal and do we have to write a letter of intention to terminate ahead of time?  And so on…..

Okay…I started it…Let’s keep it rolling!!!!!