“You know how sometimes when you make a copy of a copy, it’s not quite as sharp as, well, the original?” This is one of my favorite movie quotes (Multiplicity — 1996). It also often applies to dealership groups. You can have a flagship dealership that adheres to all the corporate policies, but as each dealership is added, it is as if they are using a copy of a copy of the original policies.
The same happens in many DMS systems. you start with company #1 and it has all the correct setups, features and data. But as you add companies #2 and #3 — they end not performing like the flagship’s system. Having true multi-company features can be an important factor in selecting a DMS.
In my previous articles, I’ve discussed four of the five factors to selecting a DMS: A report writer; Price per user; Productivity features; and Integrated CRM. In this issue, I’d like to discuss the final key factor in selecting a DMS: Centralized or Intercompany features for multiple dealerships. If you missed my previous articles, send me an email to the address below.
I once worked for a dealership group that decided to adopt the centralized accounting concept in the early days of this money-saving idea. Unfortunately their whole thought process was to move all the office staff into one dealership. There were no modifications to the computer system, no cross-training, and no restructuring. We ended up as a cramped office staff waiting in line to use a photocopier. If you are going to save money with centralized accounting, you need certain features from your DMS that will save time. The first one is a common name file shared by all dealerships. This means that when a new vendor or A/R customer is added, you only need to approve and add one record. So when their address changes, you only need to do that once. Since each dealership might have different pricing and taxing, (they might be in same state for one dealership, but in the next state for another) you will need that enabled at the dealership level. Some DMS systems can’t handle the single name file with multiple setups of taxing, pricing, credit terms.
The next feature you need is intercompany transactions. This enables you to directly impact the vehicle inventory or expense accounts of the other dealerships when you are setting up an invoice, distributing payroll, or typing a check. Not having this means a lot of settling between your various A/R and A/P accounts for each dealership and battles against “who owes what.” When I designed DealerStar, I went a step further and enabled a repair order or parts ticket to be closed to the stock number of a “sister dealership” instead of charging to their A/R account and waiting months for the cost to show up on the inventory record for the sales department. This prevents chargebacks. We also enabled stock transfers of parts and vehicles. These features save your office staff time when you centralize. We also can send out a single A/R statement to customers or email them to really save money.
The need for multi-company features doesn’t end in the accounting office. Can your sales managers see the vehicle inventory of all your dealerships? Can they see if the same customer is also working with another dealership? What about the pending trade-ins? They might have a customer today that is looking for a vehicle that is being traded in at a “sister store.” Can parts managers see all parts inventory at the other dealerships? Removing the office staff often cripples the operational managers at the satellite dealerships. Do they have the ability with your DMS to easily see car deals, repair orders, invoices for expenses, and parts tickets without having to get your accounting office to fax or email a copy? If you haven’t had much luck with centralized accounting, it might be the fault of your current DMS and not your struggling and cramped office staff.
It is time to find out what features your centralized office staff and managers need to run a true multi-company operation. Ask your prospective DMS vendor for a list of all intercompany features in their system. Most of the second- and third-tier systems can provide you with reports across dealerships but really can’t make intercompany-transactions other than debiting the A/R and A/P accounts. That is not saving you money – it is causing double the work.