Nothing but Net
To Share or Not to Share...That is the Question!
As a dealership comptroller for the past 30 years, I know too well what the most important tool is in the entire dealership and it is usually found in the dealer principal's top right drawer.... Yes...You guessed it..the dealership financial statement or the operating report!!!!
Now, I have also come across the dealers who refrain from sharing this useful tool and those who host a roundtable meeting with key employees and department head managers to discect the statement and look for weaknesses or opportunities for improvement. Their next step is to engage in a plan of action or a gameplan to improve in these areas and also look for way to further build on their strengths!
Many times, I meet with a department head manager who is ashamed that they do not really know how to read the statement, no fault of their own; but they have never really been exposed to it or received proper training.
To the group, I pose this question: What are some ways you can utilize this most important tool at the dealership? Are department head managers involved in the forecasting and budgeting included in the general business plan? How often is this information shared and is the information shared cross-departmentally?
I would love to hear your thoughts on this.......
NANCY SIMMONS
Thanks Dugan, I am with you 100%!
Even at 20 group meetings, I found many dealers did not understand where the numbers came from! Forecasting with simply a blank statement really helps everyone to understand the columns and where the numbers do come from!
Dec 14, 2010
Ryan Kleinjan
Nancy -
I like this point but will note that in my experience - it is definitely not unique to the automotive business. I think the biggest challenge that a manager faces when using this data is being able to translate it in terms that make sense to that department manager.
Financial data is tremendously powerful and useful when it is understood correctly - and tremendously 'dangerous' when it is NOT understood.
I think the best thing we can do is ask ourselves
1. Who needs to understand this data (does the function significantly impact the financials of the operation)?
2. What component of the data does that manager's dept affect (cut the report 'pie' into a piece)?
3. How can I simplify or translate the information into a cause-and-effect equation the person understands?
Earlier in my career - I was working for a very large shipping/logistics company - they suggested that they train their sales people on reading financials in efforts to better understand customers - when asked my personal opinion - I honestly felt that I would struggle jumping into a clients' financials (assuming they were comfortable sharing) and I had just spent 3 years in grad school studying this type of thing -- expecting a 'lay' person to understand the financials is unrealistic - this is why we should keep our CPAs as close as our lawyers and doctors!
Happy Holidays!
Dec 21, 2010
NANCY SIMMONS
Ryan, Good points...
I appreciate your input! However, I have seen extremely successful dealerships hold bi-weekly meetings in the conference room, hammering out the financial statement...It can be a learning and sharing experience, creating great team building amongst peers! The results were, the department head managers assisted other department to reach objectives instead of that very familar friction between departments!
Ryan Kleinjan said:
Dec 21, 2010