Author Archive: AxioMobile

Author Archives for AxioMobile

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By Phil Villegas

With the new year, comes new year’s resolutions. Usually these are personal in nature, looking to improve certain aspects of our lives leading to people setting goals to improve their well-being, whether related to better ourselves physically, emotionally or our financial well-being. The new year provides a clear and definitive break point in which to embrace change, and this is by no means limited to individuals, this can also include our businesses.

If there was one common resolution I would like to see embraced by the general dealership population, it would be that of a 5-day (or better) month-end close. Despite advances in DMS software and business process flow management, one area that I still see as somewhat archaic is the 10 days or more month-end financial statement close. This practice is still very common in many dealerships, with the exception being some mega-dealers and public dealership groups.

I attribute most stores [...]

By Marilou Vroman, CPA, CFE

In many years working as a dealership controller and as an internal auditor, I’ve unfortunately seen frequent cases where employees have taken excessive advantage of a dealership’s travel and entertainment policy.  Travel and entertainment normally are common business expenses for dealers, such meetings with manufacturers, conferences, technician training, and travel between multiple rooftops.  While travel may be viewed as an inconvenience to some employees, others view travel and entertainment as an opportunity for enrichment.  The question becomes, at what point do business travel expenses go from necessary and reasonable to an abuse of privilege and self-enrichment at the detriment of the dealer?

You’ve probably seen it or even experienced it – lavish dinners with expensive cocktails and wine, the five-star hotel room and “resort” fees to cover the golf cart and 18 holes, the first-class tickets to Europe, an occasional spa treatment or luxury rental cars.  Some dealers may choose [...]

By Phil Villegas

“They say it has no memory (the Pacific Ocean). That’s where I want to live the rest of my life. A warm place with no memory.” This was a famous line from the movie “The Shawshank Redemption”. It has always reminded me of the attitude of many dealerships towards historical financial statement analysis. For many dealerships, after being provided unit sales count, gross and net profitability, past performance is often forgotten, and the endeavor of the new month is ahead, with no memory of the past.

With the New Year often comes renewed energy for change and improvement. These resolutions should not in any way be limited to ourselves as individuals, but should also be incorporated into our businesses.

One resolution would be the incorporation of detailed financial statement analysis of the dealership.  While the thought of detailed financial analysis is enough to get most dealers, GMs and even Controllers to immediately [...]

By Marilou Vroman, CPA, CFE

With the topic of healthcare so frequently in the news and topics of discussion, I couldn’t help but notice how people feel about preventive care is quite like how some dealers feel about internal audits.

I recently visited the doctor for an annual physical and went through the usual tests including EKG, blood work and X-rays to help reveal any underlying health issues I may not be aware of.  I felt perfectly fine during the visit, and all the outward signs of being healthy were present.  The test results fortunately revealed everything was just fine. So, if we appear to be healthy on the outside, or our last physical was good, why do we keep going through the process of missing time from work or family, the unpleasantness of medical testing, and paying for those surprise lab bills that are not covered by insurance?  Put simply, it’s for peace of [...]

By Phil Villegas

For the past 15 plus years, a fair amount of the work I’ve personally been involved with relates to dealership buy/sells of all makes and sizes.  Despite the size of the transaction, nearly all of these will have either a well-documented or loosely implied list of seller’s “Add-backs”.  Add-backs are suggested adjustments to a dealership’s reported profit, essentially as the word states, add-back to profit to arrive at the dealership’s true earnings.  The spirit of most add-backs is to account for and eliminate non-operational or unusual expenses that a new buyer would likely not have to incur going forward. 

Add-backs can cover a wide range of topics, from compensation, advertising, tax, legal, travel and entertainment, unrecorded income, data processing, etc. All these add-backs are disclosed with the end goal to recast the dealer’s financial statement, and ultimately, improve the appearance of the dealerships’  profitability to make the financial prospect of acquiring [...]

By Marilou C. Vroman, CPA, CFE

Those who know me know I tend to focus on fixed operations because I find this to be the area with greatest opportunity, and often some of the greatest risk.  Parts and service tend to be a bit of a blind spot from an internal control perspective because the focus is traditionally on vehicle sales and repair orders in a high volume prevent detailed analysis and complete review. 

One area that often if overlooked in service is the cost of rentals and service loaners.  Customers often expect a replacement vehicle as part of their service experience.  For vehicles under warranty, this benefit is often paid for or subsidized by the manufacturer, either via reimbursement of rental days, or by requiring a fleet of loaners to be in place which are eligible for additional incentives and other credits to offset their cost. 

While there is often no cost [...]

By Sam Flores

The debate regarding the “right” amount of automation in the office has been around as long as I can remember.  I for one, am a huge supporter of automating the office. Specifically, automating the redundant, routine tasks that can be easily set up, provided they are monitored. One specific example is the use of Microsoft Excel. You can integrate this software into nearly every aspect of a dealership’s operations, whether used simply for financial reporting, budgeting and forecasting, bonus calculations, or using it to power post entries into the DMS.  Using features such as V-lookups, pivot tables for example can help employees work with large amounts of data in a fraction of the time.  In your DMS and peripheral software, some tasks and reports can be preset to run at precise times, using preset formulas and criteria. This type of automation can reduce the inconsistency or errors in doing a recurrent task that is [...]

By Phil Villegas

With the Holiday season upon us, many dealerships are planning year-end parties to celebrate the year. These gatherings are great for employee morale and a great opportunity to socialize with other co-workers in a much more relaxed setting. Some dealerships will have their event onsite at the dealership with a pot-luck or barbecue, while others will choose to have their event hosted at an outside location.

Regardless of the location, one practice I saw a few years back from a dealer in their effort to be equitable to all their employee’s hard work was the following:

Early in December, the dealer would send notices to its vendors informing them that in lieu of any holiday gifts or baskets, to either contribute gifts or funds to be used as door prizes during the dealership holiday party. Any gifts or baskets received at the dealership would be kept together to be shared during the [...]

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