PowerSports Business

November 6, 2017

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Page 41 of 43

SOLUTIONS 42 • November 6, 2017 • Powersports Business www.PowersportsBusiness.com procedure deficiencies. What needs to change? Make those changes now. ACCOUNTING While it is very important, accounting does not happen without input from the other departments at the dealership. Year-end stresses many people out; there really is no need for it. If the accounting department does each month-end with diligence, year- end is just another month-end. In the mean- time, let's talk about things that need to be done completed. 1. Paperwork complete. Make sure all doc- uments have been completed and processed. This means you need to wait for the items from parts/service and sales. They have to make sure they have completed and processed all ROs, sales deals, special orders, etc. Inven- tories can be adjusted later. It is not critical to have them done before you begin, although that would be nice. 2. Accounts Receivable. How is your accounts receivable sub-ledger? If you gener- ate an accounts receivable aging report, would the total on the report match your general ledger total? All payments received should be posted to their respective invoices; make adjustments for internal accounts or uncollect- ible accounts. 3. Accounts Payable. How is your accounts payable sub-ledger? Does the accounts payable aging report match your general ledger total? If it does not, find the problem now. 4. Major unit inventory. Does the total of your major unit inventory match the general ledger? If it does not, find the problem. 5. Deposit Accounts. Check the balances for special order, repair order and major unit deposit accounts against the general ledger. If you have done your due diligence throughout the year, these should not be an issue. 6. Warranty claims. Have all warranty claims been resolved? 7. Bank reconciliation. Is your bank account reconciled? Most of you can go online to print your statement. Reconcile this account weekly or every few days, at the very least once a month. The reconciliation of your bank account should be quick and easy; if not you may need to revisit your processes. FINANCIAL STATEMENTS 1. Trial Balance. Print your Trial Balance. What are you looking for? Look to make sure you are in balance, debits equal credits. That is what is important on this report. If you have a DMS, make sure you are looking in the right place. For example: if you have multiple departments, you can only look at the consoli- dated department, all other departments will be out of balance. 2. Balance Sheet. Once the Trial Balance is in balance, generate a Balance Sheet. Since you have already run your sub ledgers and adjusted as needed, the balances should be correct. 3. Profit & Loss. Generate the Profit & Loss (Income) statement. If you are able to gener- ate this for all departments and a consolidated department, do it! It is important to view each department individually. This allows you to find issues, research, and correct them. 4. Problem areas. Identify and fix the prob- lem areas. Gather all of the managers together to brainstorm the best way to fix issues. The year-end process should not be cumbersome, if processes are followed throughout the year. Lastly, remember to keep all of your documents for year-end. Clean up, refresh, impress and progress! Enjoy your holidays — start early! PSB Paula Crosbie is the training development manager with CDK Global Recreation. She has been training and consulting with powersports dealers for 15 years. She can be reached at paula.crosbie@cdk.com or 801/519-7570. CROSBIE CONTINUED FROM PAGE 41 JONES CONTINUED FROM PAGE 40 that money into high-turn stuff. First, run a monthly report (many dealers do this every two weeks) on no sales for six months. Sea- sonality affects this a bunch, but these are slow movers that should be reduced when possible. Next, run a report on no sales for 12 months. This is your OBS report and these items need to go away ASAP — they don't go up in value. Here is how to approach this: 1) Use the sup- plier return programs. 2) Sell it for market value (whatever someone will pay for it) wher- ever you can. 3) Donate clothing and acces- sories to charities for fundraisers and take the write-off. 4) Write it off and take the tax break (consult your accountant about this). Analyze your sales history. One of the biggest ways to control your inventory valua- tion is by stocking what you need, just before you need it. To do this, you have to know what sells and when. Focus on high-turn seasonal items and place orders that bring in the bulk of the inventory just before the season. The best system for doing this is called Open-to-Buy. That would be a longer discussion, but basi- cally, it sets budgets for inventory categories over specific time periods (generally quar- terly). You can't buy in a given category unless you have sold enough to have open-to-buy dollars to spend. It's kind of like a checkbook. Create visualization/lifestyle displays with clothing and accessories. I've mentioned this before, but displays that utilize mannequins and units helps customers see themselves using the products. This stimulates sales of both units and clothing. You will sell more UTV/ATV products if you create displays that feature mannequins and useful seasonal acces- sories such as winches, gun scabbards, special tires, racks, cabs, plows etc. I hope you will incorporate some of these into your business and move toward better inventory control and improved cash flow and profitability. PSB Steve Jones is founder and president of SJ Con- sulting, Inc. He has worked in the powersports industry for more than 30 years, for dealerships and manufacturers, as a consultant and trainer. Contact him at stevejonesconsults@gmail.com.

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