In my position I visit many dealership accounting offices, and recently I’ve noticed a common problem. Accounting employees aren’t being properly trained. This is a big problem because if your office isn’t being managed efficiently, your money isn’t being managed efficiently.
Typically, new hires are trained by the person they’re replacing, or by another employee or Office Manager, who are already stretched. As a result, new employees learn the bare minimum of how to do their jobs.
Another problem is that accounting staff in dealerships tend to be overworked and paid less than accounting positions in other industries, so sometimes people are hired without an adequate accounting background. In one dealership I know of, the dealer gave his daughter a position in accounting, even though she didn’t know what a debit or a credit was.
Without adequate training and oversight, mistakes can happen that can lead to gross profits being misrepresented. If mistakes continue unchecked, the results can end in a huge mess. Recently a dealership hired an outside accounting firm to do an audit, and it took many months and a lot of money to get everything cleaned up.
The biggest reason accounting support people are not trained is lack of time. Dealers often run their accounting departments with as few employees as possible due to the perception that this is a cost center, not a profit center. This is a mistake.
Instead of asking how much another employee is going to cost, ask what is the cost of having inadequately trained employees and the resulting problems associated with that?
Dealership principals and senior management must recognize the value of training and mandate training—or it won't happen. The top resources for training office employees include:
1) Dealership Management System (DMS) vendor
Ideally your DMS vendor can help with setting up accounting best practices and problem-solving. Unfortunately, depending on your DMS vendor, they can also be part of the problem. Some DMS vendors hire software support people that know how the software works but they’ve never actually worked in a dealership or in an accounting position.
Recently I heard a complaint about how one DMS provider's quarterly reports were wrong (not ours), but nobody at the DMS could help the accounting staff and they didn't know how to fix the report. That dealership’s accounting staff is now burdened with having to create manual reports, which is an enormous waste of time, energy and money.
Make sure your staff are being trained by individuals with auto dealership accounting knowledge and experience. If your DMS provider can't provide that, consider switching to another DMS.
Alternately, most DMS solutions have internal training tools. Learning management systems are a good first step and all new employees should be mandated to use them.
Also check to see if your DMS provider has a User Summit or other educational events. Send at least one of your accounting staff to these events to learn about the newest features and releases. This is a great opportunity to learn new processes and shortcuts that can save your entire department a lot of time.
Once a year, arrange for on-site training from your DMS vendor to teach your staff the same info: new features, new processes and how to do their jobs more efficiently.
2) Outsource training to a CPA firm experienced working with dealerships
Some outside CPA firms that do audits also provide employee training.
3) Join (or start) an accounting group on Facebook specific to car dealership accounting employees.
Facebook groups are a great place to bounce ideas off others. It's a great help to be able to say, “Hey, I want to try something this way,” or “I tried something this way and it doesn't work.” You can get feedback on how to solve problems. If you can't find the right Facebook group for you, start one yourself!
4) Train senior management how to manage accounting
Before promoting or hiring a new general manager, ensure they’re familiar with accounting office functions and how to manage them. If they're not, arrange for one-on-one training with your DMS provider, outside accounting firm, or make sure they've completed a program like the NADA Academy. Going forward, look for candidates with a college degree in auto dealership management; or encourage promising employees to obtain a degree and provide a program to help them get one.
5) Cross-train employees
Cross-training is critical. When one of your accounting employees calls in sick or suddenly quits, are there other employees who know how to do that person's job? Make sure there are at least two other employees who know how to perform the functions of every role in your office.
6) Train the "why"
In addition to training “how” to do something, make sure your staff know the “why” behind what they’re doing. This is a critical part of training that's often overlooked. Many times, inefficient ways of doing something are passed from one employee to another because that's the way it's always been done.
Without knowing the “why,” it's hard to take initiative to try and improve a process. For example, instead of training just how to post a deal, make sure your staff knows where that data goes, why it’s important to do quickly, what decisions are made with that data, and the consequences that can happen when the data is wrong.
Your accounting office may not generate revenue like your sales or fixed ops departments, but what happens there on a daily basis has a big impact on your profits. Make sure your accounting staff have adequate training, support and resources so they can do their jobs efficiently.