I feel like I need to start this post with a joke about “Captain Obvious,” but since I’ve had this discussion with several dealers in recent months I’m not so sure.

Regardless of what your short-term goals are (better inventory management, improving lead conversion, reducing operating costs, etc.), the real goal is to improve how much cash you put in your pocket at the end of the day.

So, in that vein here are 3 ideas to improve cash flow:

1 – Tighten Up Your eContracting Process
The more efficient your F&I office is with processing deals via eContracting, the faster you get paid (in theory anyway). Improving the efficiency of eContracting can be as simple as reviewing what forms are available in your local market, to more complex process changes like who is responsible for sending wet-ink forms to lenders each day.

2 – Monitor Floorplan Effectiveness
Do you know how many vehicles on your lot qualify for Floorplan that are sitting unleveraged? With highly favorable Floorplan interest rates and payment terms available from both captive and non-captive lenders, there’s no reason not to leverage your inventory for cash. Because your inventory is always moving, consistent attention is required to take advantage of favorable floorplan rates without letting aged inventory eat away at your profitability.

3 – Stop Rolling Un-Funded Deals
Yes, we’re talking about you Florida*. And yes, you can still hit 40% service contract penetration on 250 new cars a month without playing some paper-shell-game. You might find some resistance from your F&I managers, but if they can’t sell product to qualified buyers on a funded deal, let them know Verizon is hiring.

More so than any other process, how you manage cash has an incredible impact on your business. Implementing a new process will help plug leaks, but without ongoing review and improvements new leaks will always spring up.

If you have a better way to improve Cash flow, or a reason why you’ve seen efforts like these fail in the past, leave a comment below. I don’t know everything, just ask my wife.

*(Something about states with SEC Schools seem to be the biggest culprits here.)