Implementing strong guidelines in the parts department to prevent theft.
- The Weekly Spiff!
- Posted by AxioMobile
- Comments Off on Implementing strong guidelines in the parts department to prevent theft.
By Jorge Arrieta
In any dealership, parts may be considered assets at the highest risk. Why? Because parts theft could very easily remain undetected since few people monitor parts activity besides parts managers. Between the high transaction volume, frequently changing part numbers, returns, new vendors, and special orders, it can be a challenge to know everything that has been happening in the parts department.
By implementing a daily bin count and an annual physical inventory, dealers and controllers can have more control over their parts inventory.
When performing a daily bin count, one should select a few high risk parts from the parts pad and verify they are still in inventory. Some examples of parts to select include those that have a history of plus/minus adjustments, scrapped parts, and parts sold for low or negative gross profit on parts tickets or repair orders.
We recommend having an individual from the accounting office trained on the proper procedures to conduct an unannounced bin count. The individual should be able to print out the parts inventory and find bins in the parts department, without the help of parts department personnel. Then bin counts can be checked against on hand quantities in the parts pad and vice versa.
You might think your parts department is operating effectively and efficiently, but you may be surprised by what you find when you implement and enforce new internal controls.