By Brian Lucas
The Accounting Guys
In the quest for optimal simplicity and accuracy, dealerships strive to find the elusive Holy Grail of Dealership Management Systems (DMS). One key attribute of the best DMS’s is Integrated Accounting—an often-unsung solution to streamline operations and achieve unparalleled reporting capabilities. This article delves into the numerous benefits of adopting such a system while debunking misconceptions that often lead dealerships to settle for generic accounting software like QuickBooks because they think it will be easier and/or cheaper.
Reducing Training Costs and Encouraging Cross-Training Opportunities
One of the primary advantages of using a DMS with an integrated accounting module is the reduction in training costs. By implementing a single, comprehensive platform for all dealership functions, employees only need to learn one system. This streamlined approach simplifies the onboarding process for new staff and minimizes the time and expenses associated with training. With fewer systems to master, employees can quickly become proficient in their tasks and focus more on providing top-notch customer service.
The trick is to distribute the tasks between your workforce, making large, cumbersome tasks into simple, step-by-step tasks. One of the easiest ways to achieve high efficiency is to make each step as simple as possible. By reducing the barriers between departments, integrated accounting encourages collaboration. Lower-level employees who may not have an accounting background can be trained to handle higher-level accounting functions with ease. A few examples of this would include having a finance manager reconciling contracts in transit, a parts manager verifying discrepancies between the valuation reports and the financials, or an office clerk reconciling the daily customer receipts for the day to make sure it all made it to the bank. This distribution of accounting tasks not only empowers the team, but also ensures that essential financial tasks are not dependent on a single individual. This redundancy is valuable for business continuity and mitigates the risks associated with staff turnover or embezzlement.
Reducing Subscription Costs and Professional Fees
It seems as if the first thing they teach in most business management courses is to cut costs and look for something cheaper. Cheaper is not always better—especially when it comes to getting the right technology to support your business. It also comes down to how you understand what this concept truly means and making sure you are accounting for all of the costs. It’s easy to think you’re saving money by purchasing a lot of smaller tools to complete specific jobs; in reality though, opting for a multi-functional tool not only saves you money, but also makes the job easier to perform, thereby reducing your labor costs. This concept holds true in regard to DMSs with integrated accounting.
Merging information from multiple systems like QuickBooks, Excel, and other POS systems can be time consuming and require a lot of effort. It may lead to the impulse to hire more staff to perform the duplicate data entry or paying a costly accountant who can make it “good enough” for the business. As a seasoned accountant, when possible, I avoid merging multiple systems because I know it will involve constant battles with timing differences, backdated items, duplicate postings, server issues, etc., when the better—and, overall, cheaper—solution is simply upgrading to a more integrated DMS.
Yes, you will pay less money on a QuickBooks subscription compared to DMS systems with Integrated Accounting from a subscription standpoint, but you will also likely end up paying more money in staff costs and/or consulting fees to get all of the systems to tie together. Don’t take this challenge upon yourself when it has already been done and constantly continues to be improved by thousands of dealerships. The reason a dealership purchases a DMS in the first place is because QuickBooks isn’t designed to be the best fit for dealerships. So why continue to hold onto accounting software that isn’t built for dealership processes?
If you get the right DMS with integrated accounting, you simply process your sales like you always do and refresh your balance sheet, income statement, or cash flow analysis because the data is already there. You can see if you are making or losing money multiple times a day without having to worry that something double posted or was missed by office staff because of common and expected human error. And yes, I do mean expected human error.
More Access and Reporting Capabilities for More People
A significant advantage of a DMS is its understanding of the diverse roles within a dealership. Custom security settings enable you to tailor visibility and functional access for different staff members, catering to the specific needs of both large and small dealerships. This flexibility contrasts with other systems that lack such customizable options, providing a more user-friendly and efficient experience for the entire team. With accounting housed in a separate system, you immediately create a bottleneck because not everyone is able to have access or learn small pieces of the process to help complete the work. Having your team learn what reports and metrics to use promotes more conversations about numbers and process improvement in the business that they recognize and fix on their own.
Technicians and accountants come from two distinct professional fields, and their roles require different skill sets and expertise. While their professional vocabularies and common terms may differ due to their specific fields, having a shared set of fields and options provided by the DMS facilitates easier understanding by both parties. The integrated system allows the accountant to understand the financial data and requirements from the technician’s perspective, while the technician can grasp the financial implications and reporting needs better. This synergy not only bridges the gap between their distinct disciplines but also enhances collaboration, leading to more efficient financial management and streamlined project tracking.
Conclusion
All in all, the “Holy Grail” in a DMS is the ability to make better educated business decisions, which can only come from having up-to-date information at your fingertips. Don’t settle for a DMS that only gets you halfway there and limits how often you get the information you need to run your business.
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