Thankfully NADA is back in person this year, and that gives all dealers a great opportunity to meet face-to-face with their vendors. Many traditional best practices have taken a back seat to widespread worries over inventory and hiring – like vendor reviews.

Yet, regularly reviewing what you’re paying for and what you’re getting in return could uncover duplicate services or lackluster results that once resolved could save thousands of dollars every year.

You can bet your vendors are eager to meet with you at NADA, so now is the time to prepare.

Best Practices before NADA

• Get started by compiling a comprehensive list of all your vendors – from lead providers to your CRM, websites, and pretty much anything else you’re paying for. Pull a report from your check register or run a DMS vendor report.
• Find and review contracts and create a spreadsheet with contract renewal dates. Many dealers are moving contracts to a third-party document management platform, which makes a lot of sense. Instead of digging through paper files, it only takes a few keystrokes to create spending reports and stay on top of auto-renewals.
• Look for extraneous vendors and duplicate services. You may be paying for a service that your OEM provides for free. Or paying two companies for the same marketing services.
• Audit every vendor for ROI, using your own statistics. Don’t blindly trust what a vendor tells you about its performance.
• Contact vendors you want to meet with at NADA (they’ve likely already reached out to set-up meetings), and schedule a time to meet.
• Research alternative vendors if a particular service or product doesn’t seem to be delivering for you. Contact these vendors and schedule a quick meeting and/or demo.
• Create a list of questions and/or concerns you want to make sure to discuss.

Best Practices during NADA

• Arrive at vendor booths armed with your list of questions and KPIs.
• Be prepared to voice your experience, whether good or bad, and give vendors a chance to correct problems. Obviously, improvement will not happen on the show floor, but it sets the stage for vendors to improve quality moving forward. You don’t want to go through lots of vendor churn, so it’s important to save relationships when you can.
• Don’t be afraid to ask the tough questions, such as: What are you doing to advocate for great customer service? Or, what is your procedure in the event of a ransomware attack? Or, what happens to our data if we switch DMS providers? Your vendor may not have all the answers right away, but after the show they will certainly follow-up. Those who don’t may be signaling your business is not that important to them, and so you’d be better off researching competitors.
• Finally, be prepared in the event you decide to terminate a vendor. While this is not likely to happen on the show floor, a clean exit strategy can prevent potential problems down the road. Consider a termination checklist that details what you expect from the vendor, such as returning all collected data and relinquishing access to software systems. A termination process will smooth vendor transitions.

Vendor management is arguably more important than ever as dealerships seek to do more with less. It’s easy to forget with so much change and disruption in our industry, but a hard look at your vendors can save you money and get you better performance. A return to an in-person NADA show is a great opportunity to meet face-to-face and ensure your current partners are your best option moving forward. Start preparing today!

In my former life as a Controller, I was always aiming for a fast and accurate month-end close. Our business office typically closed the books within five to seven days. Is that a realistic deadline? Not according to Christine LaFontaine, Owner & CFO of Matt LaFontaine Automotive, which owns three dealerships in Michigan. Christine, who is also a former Controller for a 13 store group with 21 franchises, believes that it’s frankly too MUCH time. How many days till a full close you ask? "Two days."

Christine's dealerships consistently finish closing their books on the second day of the month; and for good reason. Having accurate information sooner gives management more time to analyze what went well and what didn’t for better decision making, reveals items of interest that may be affecting the bottom-line, and allows the entire group to move forward instead of dwelling in the past for the first week of each month.

There are two big reasons many dealerships struggle to close their books quickly: lack of pressure from the top and co-worker buy-in. A Controller can’t do it alone. A two-day close requires that the entire dealer group be on the same page because a lack of data from one department can delay the entire process.

Beyond setting dealership-wide expectations and getting management on-board, LaFontaine has several recommendations that other groups can follow to achieve a two-day close. These include:

Start early and clean schedules continually. LaFontaine works schedules weekly, and even daily, when it comes to busy departments like service and parts. “People post and make mistakes so the schedules all get worked at least once a week,” she said. “It’s much easier to catch mistakes, like someone writing a check that they shouldn’t have or an expense posted twice, on an ongoing basis rather than trying to do it all at the end of the month. Keeping things clean is much less stressful and it works.”

Use a check-off list. LaFontaine swears by her check-off list that breaks down month-end procedures into smaller tasks. Each task has a due date and it is segmented by weekly/monthly action items. Due dates are set in stone, so the last few days of every month are spent fact checking, clarifying information, and getting memos together, not scrambling for data. Departments work together to complete items since they all have an interest in getting paid properly and on time.

Estimate payroll accrual and bonuses at the beginning of the month. This recommendation is a major mind shift from my days as a Controller, but LaFontaine swears by it. She has an Excel spreadsheet for each salesperson and everyone in F&I and uses current payroll and bonus estimates to populate the sheets. “It doesn’t have to be completely correct,” she said. “Our pay plans are not hard so my estimates are very close.” She explained that management likes this approach because income and expenses are matched in the month they occur, regardless of when money changes hands.

Look at trends. LaFontaine relies on trend reporting in the group’s DMS to catch accounting errors and make them right before too much time has passed. “I can see 12 months of activity,” she explained. “So, if there’s an expense that’s $100k more than the month before, for example, I can ask questions of the department. It’s a double-check for everyone and people appreciate it because they get paid on the bottom-line, and they need to know what they’re getting paid on is proper.” 

Get vendors on board. LaFontaine communicates to her vendors how important it is to have invoices and month-end statements in on time. She stresses this is integral to working with the group, but there are challenges. “Paint inventory can be painful, but I stress how important it is to come out on time and get the work done,” she said. “Every once in a while, we have a blip with a vendor, but when it comes down to it, we’re the customer and they need to make us happy.”

Reward your team. Closing the books is a team effort so it pays to encourage and reward employees for a job well-done. LaFontaine celebrates with a pizza party for the entire dealership. “We talk about the month and reward with cash one ‘everyday hero’ who really stepped-up,” she explained. “We need to give people a high-five because we all work very hard. It pulls us together as a team and gives us a chance to talk about how we did and how we’re going to move forward.”

When I was a Controller over five years ago, closing the books within seven days was the norm. Now I know that’s old-school thinking. Controllers like LaFontaine have found that starting early, getting department and management buy-in, taking advantage of technology, and rewarding the entire department for a job well-done, can result in a two-day month-end. Now it’s your turn.

As the fable goes, a frog put in a cool pot of water that is slowly heated will happily hang out until its eventually cooked. The gradually changing temperature fools it into thinking conditions are not changing. When it comes to your DMS provider, you cannot be complacent like the frog.

There are many great providers out there who deserve your loyalty, but the DMS space continues to generate headlines with more acquisitions and consolidations coming left and right. You’ll remember DealerSocket bought Auto/Mate last year, only to be acquired by Solera this year. That was the second acquisition for Auto/Mate in just two years.

And they’re not just buying each other. Many are snapping up third-party providers too. Back in 2018, CDK dropped over 100 members of its support staff to, as its managing director stated, “align itself with a growth strategy,” then announced it was acquiring Elead.

This past spring, CDK bought Roadster and R&R bought Gubagoo, to offer digital retailing tools to existing customers. The cynic in me has to wonder if in the future these big guys will require their dealer clients to use the platforms they now own.

With so much movement in the space, it’s prudent to keep a keen eye on your DMS vendor. After all, although vendors talk about putting customers first and wanting to be your “partner,” they are businesses with balance sheets to monitor, and in many cases, shareholders to please. 

Don’t get me wrong; change via acquisition or consolidation is not always bad; these can lead to increased functionality or value. What is bad is when it catches you off-guard and a provider you considered a “friend” gradually introduces new ways of doing business that don’t work for your dealership.

As with any relationship, you should be cautiously aware of warning signs. Even if everything is great today, be vigilant of your DMS changing in the following ways:

• Change in contract terms – DMS vendors will always push for a longer contract length - that's just good business for them. You should be alarmed if the DMS forces longer contract terms, without an off-setting benefit to you, like lower prices or increased services. Don't be forced to scratch their back without them scratching yours.
• Deviations in support – CDK likely cut support employees before acquiring Elead because it needed to trim payroll or because workers were redundant. Either way, deviations in the level of support is a signal that change may be coming.
• A new primary strategy – Most companies have a primary business strategy, such as cross-selling more products, offering the most innovative tools, or delivering the best support. A company moving away from stellar support and toward pushing more products, for example, is an early sign they are prioritizing revenue over customer satisfaction.
• A change in leadership –Be on the lookout for executives moving from one DMS to the next. Those executives will be bringing their playbook along – and may implement many of the negative company practices you have been trying to avoid.
• Changes in product offerings – CDK and R&R saw market openings when they purchased digital retailing platforms, especially since the pandemic sped up dealerships’ adoption of technology to power remote selling. There’s no harm in offering more products. The harm comes if vendors require customers to use those products.
• Restricting third-party vendors – Dealertrack DMS and others make a big deal about allowing dealers to work with preferred third-party vendors. Starting to restrict certain vendors is the flip side of requiring certain vendors. Be wary of both strategies to restrict how you run your business.
• Changes in data retrieval – Some vendors have a reputation for essentially holding a dealers’ data hostage if they try to make a DMS switch. If your vendor starts to get cagey about how you retrieve data and/or how much it will cost, that’s a red flag that a change you may not like is possible. Be straightforward and ask the cost outright; if your vendor can't give you a straight answer, be wary.

Now for the good stuff. There are plenty of vendors in the market who exhibit integrity and best practices that put dealers first, even if these vendors are interested in being acquired.

A DMS to stick with may exhibit these signs:

• Offering more products – A DMS that is continually innovating to bring you new products is working for you, not against you. A good partner DMS will educate you; not upsell you.
• Integrating more third-party vendors – You should be able to work with companies that are best for your business. A DMS that understands that and works to create new relationships with third-parties is good for your business.
• Contract Flexibility –A DMS that doesn’t push contracts understands continual improvement, stellar functionality, and hands-on support, are required 24/7 to keep a client base. They work harder to keep you happy, which only benefits you.

As the DMS space continues to generate headlines, it’s smart to remember the fable of the frog and stay vigilant. Change can be good, but only if you’re aware of it and on-board. Otherwise, you may end up with a solution that is no longer a best-fit for your dealership. 

“Inspect what you expect” is a well-known business phrase that I think is particularly applicable to our industry today. That’s because many dealership employees have a LOT of time on their hands right now. Why not re-direct that time towards everyday tasks that you expect are getting done, but often don’t have the time to inspect?  

Our unprecedented market, with virtually no new cars on the ground and used cars impossible to come by, has left many dealership employees sitting idle. While experts predict vehicle supply won’t return to normal until the first quarter of 2022, you don’t want to let go of core staff because the market will calm down.

I have spoken with multiple dealers who are repurposing some of that employee downtime into completing useful but often delayed house-cleaning tasks. Will the employees probably complain? Sure. Is it a great use of downtime? Absolutely.

Here are six tasks to keep employees busy and, more importantly, help your dealership with organization, compliance, and safety:

1. Cleaning and organizing deal documents – When you’re busy closing deals it’s easy for business office and dealer forms to pile up and become disorganized. But in an industry as regulated as ours, you can’t afford messy paperwork. Have you staff audit some deals; ensuring proper signatures exist, certain forms exist, and the deals are organized a in consistent manner. A little TLC on your deal jackets will unquestionably lead to increased productivity when that deal needs to be reviewed in the future.
2. Scanning files – Instead of multiple filing cabinets, stacks of paper, and countless folders, now is the time to contract with a third-party document management company and go digital. If you already have a scanning department but have fallen behind on digitizing documents, now is the time to catch up. I’ve spoken with dealers recently who are temporarily adding scanning stations to clear backlogs. One word of caution: proper scanning requires some training. Every document in a file must be legible, in the proper order, and labeled correctly. Sloppy scanning with missing pages or illegible information could result in hefty fines if auditors come calling. Before re-purposing employees to a scanning station, conduct internal scanning training to keep everything on the up and up.
3. Validating OSHA requirements – Every dealer is required to have an emergency action plan to comply with OSHA standards, but when is the last time you reviewed yours or shared it with your employees? Assign an employee to review and validate your OSHA compliance. OSHA offers a free, on-site consultation program that can help take your safety programs to the next level if you find deficiencies. Additionally, audit your documents to ensure you have properly stored all the necessary employee documentation, like training certifications.
4. Validating Red Flag compliance – Every dealer is also required to have a written Identity Theft Protection Plan. Now is an opportune time to review and validate yours. Due to the changes in how consumers purchases vehicles caused by COVID-19, identity theft more than doubled in 2020 as compared to 2019. A thorough review and update of your plan is a smart move to protect your customers and also your dealership against fraud.
5. Conducting perpetual part inventory counts – Any employee can count parts during slow times. Assign each person a bin. Then, anytime employees have an hour or two of idle time, they can count their assigned bins. Regular physical audits are a boon for your bottom line because they reduce inventory costs from theft, waste, and obsolescence.
6. Spring cleaning – You may not be asking your employee to grab a mop per se, but it’s always a good time to do some deep cleaning. Check cabinets, desk drawers, closets – trust me: you'd be amazed where critical, auditable documents can end up!

Take advantage of the market slowdown by re-purposing employees to inspect and improve tasks and processes that are often put on the back burner during busy times. The payoff will be a better organized, compliant, and safe store that’s ready to hit the ground running when vehicle supply rebounds.

It has been about 5 years since I worked as a controller in a dealership, and many things have changed in the auto industry since then. One thing I am surprised to see has not changed is the lack of designated compliance officers. We didn’t have one then, and most dealerships still don’t have one today. 

Compliance officers can protect dealerships from liabilities and hefty fines. Yet, this position is rare. Only 14 compliance officers were accounted for in the NADA 2018 Dealership Workforce Study, according to ESI Trends, a Largo, Fla., consulting firm that conducts the study.

While this data is a few years old, with the pandemic, it most likely hasn’t improved, and current numbers could well be even lower.

The auto retail business is one of the most regulated in the country and yet, the compliance officer post is largely assumed to be a secondary job responsibility. In fact, it is generally tacked on as a formality to an overtaxed position.

This is a huge risk. If policies for finance, marketing, or sales do not meet federal and state regulations, your dealership could be in for huge penalties.

I’d argue the risk is even higher now. The abnormal market created by COVID-19 has pushed more consumers to research and purchase vehicles online. As a result, the risks of identity theft and fraud have risen dramatically. Ignoring the red flags of identity theft – or unintentionally violating them – can result in fines up to $3,500 per violation.

You also have to protect your dealership from carelessness. Leaving sensitive customer paperwork – like a photocopy of a driver’s license – out in plain sight can result in fines as high as $11,000 in some states. Failing to maintain your dealership’s banking license can result in a 90-day license suspension, effectively paralyzing your sales.

As dealerships across the country regain momentum, rethink hiring, and begin to bring staff back, now is the time to prioritize the compliance officer position. This person can ensure the protection of your bottom-line, legal liability, and brand reputation.

A good candidate may or may not have dealership experience, but a background in accounting and/or finance should be a priority. But, you don’t want just a numbers person. An effective compliance officer must also be able to form relationships and trust with employees at all levels of your dealership.

This is important because it falls to the compliance officer to explain the motives and reasoning behind why something can or cannot happen. Once employees understand the “why,” they are less resistant to change and more likely to follow proper policies.

There will be pushback. Your employees may feel the compliance officer is there to make their jobs harder, when in actuality, he or she is protecting managers’ jobs and the rest of your dealership. Top-down support can help break-down resistance.

Your senior leaders should create clear channels of communication between the compliance officer and the rest of the dealer group. They should support employee trainings on a regular basis, and defer to the compliance officer in instances of employee pushback.

Part of setting a compliance officer up for success is greenlighting the right tools and third-party partners. For example, an electronic document management solution makes it easy and fast to retrieve and review deal jackets flagged by compliance software. It also helps with overall compliance since customer information is safeguarded in the cloud instead of in overflowing file cabinets or document boxes. Third-party compliance partners help the compliance officer stay on top of issues and changing regulations before there’s a problem.

The responsibilities of the compliance officer may differ from dealership to dealership, but in general daily tasks include walking the floor to ensure no papers with customer information are left lying on desks, prepping/maintaining safety inspection stickers and FTC Buyer Guide postings, staying up to date with state licensing requirements, and performing regular parts and service audits.

The compliance officer also evaluates third-party vendors responsible for maintaining information technology, banking information, and customer data, to ensure ongoing compliance. An electronic document management platform with contract query by vendor and comparison capabilities is helpful here as it allows this task to be done with a few keystrokes, instead of digging through paper files.

As your dealership regains momentum and you think about hiring again, consider adding a dedicated compliance officer to your team. Don’t find out after the fact about infractions and pay fines, or take a hit to the brand you’ve spent years building. Invest in compliance today and protect your business far into the future.

You just paid another huge DMS bill, or you heard about a great new system from your 20 Group, or you want better support. There are a myriad of reasons dealers decide to switch DMS providers. Whatever the reason, it’s a major decision because your DMS touches every aspect of your business.

I get it. I’ve been a Controller during a DMS switch and it’s a decision no one should hurry or take lightly. No matter what, it will disrupt your business and challenge your team. Yet, if you put in the time to carefully select the right partner, the positives will outrank the negatives.

The following information walks through the tips and tricks of DMS contract negotiations, what to expect, and what to watch out for when analyzing providers.

How to prepare.

Before you approach any new provider it’s essential to do a thorough analysis of your current system. Perform an expense analysis of your DMS and also of all third-party spending. This will tell you exactly how much your DMS is costing per month.

Prepare a list of all systems that integrate with your DMS. Start with the obvious – such as your CRM, desking product, service applications – then move to less well-known integrations, such as your parts scan gun.

Review business components not directly tied to your DMS, such as your website and inventory. I remember when my dealership switched; we battled for months to understand all the websites where we listed inventory to make sure prices were correct and reflected in the new DMS.

Next, meet with your dealership managers to learn what is working with the current system and what is not. Gather input on other systems they may have used before. Chances are, some may have some recent exposure; especially if they are newer to the organization. 

Finally, narrow down exactly why you want to make a switch. Is it purely price, or are you looking for different functionality? Maybe you’re planning to buy another store and are concerned your current system isn’t flexible enough to handle the addition?

Once you’ve isolated your reason, set up a meeting with your current provider and discuss the problem with them. Maybe they have a solution you don’t know about, or they’re willing to negotiate on price to keep you as a client. There’s no reason to move if your current provider is willing to take care of you.

Set your priorities.

You’ve done your due diligence and decided a new partner is best for your business. Now, set your priorities for a new system. The biggest driver for most dealerships is price - they simply want to pay less for a DMS.

If this is your biggest priority, make sure you’re not losing something essential for that lower payment. When my store went through a transition, it sure seemed like it was going to be cheaper. But we ultimately had to source other programs to get the functionality we needed. Those cost savings virtually evaporated.

Determine what functionality you need to run your business. More times than not, dealers overpay for functionality their staff does not even use. You don’t always need the Ferrari of systems. On the flip side, don’t overlook core components that you absolutely need. Realizing you’re missing an aspect after the switch can be a major disruption, even if you can add it in later.

Support and quality of service should also be a high priority. Don’t simply listen to what a provider has to say about this issue. Lean on your 20 Group and other allies in the industry to give you honest answers. They’ll tell you if you can expect to wait on the phone for hours when you call with a problem. Then you can steer clear.

Add data retention and ownership to your priority list as well. You want to know your exit strategy. Will you have to pay to get your data back? Will there be conversion costs? Too often dealers ask these questions after signing a contract. Ask before so you go into the relationship with clear expectations.

Finally, think about DMS capabilities in regards to your long-term plans. Most DMS contracts last three to five years. During that time, are you planning to add a store? Start a wholesale parts department? Open an RV dealership? Whatever your plans, make sure the system can morph and adapt along with your business.

Know the timeline.

A DMS switch is a lengthy process with major milestones that begin far in advance of signing a new contract. The following timeline will help prepare you for what to expect.

24-months before current contract end – This is when you should start investigating a switch. Prepare your cost analysis of your current system. Meet with your dealership managers to discuss likes, dislikes, and needs. Complete a line-item review of your current DMS services. Determine the nuts and bolts that hold your system together and what is crucial for a new system.

15 to 6-months before current contract end – This is when you should begin to engage with new providers. Lean on your previous analysis to determine who to engage. If you want hardware support, approach Tier 1 providers, like Reynolds or CDK. Tier 2 providers, like DealerTrack, or Auto/Mate, do not provide in-house hardware support. Tier 3 providers are the least expensive but also offer the lowest level of support.

Set up product demonstrations with your managers present. Steer the conversations towards what your dealership needs, and have managers run through everyday tasks – such as cashing out a repair ticket– to get a feel for how the system works in real-world situations.

Narrow down your choice and begin contract negotiations (more on this in the next section). Thoroughly read the final contract before signing. Contracts are complicated, often with many sub-items, so call in a consultant where needed. Don’t assume you know something. Make sure you do.

Finally, iron out implementation and transition details, schedule trainings, and lock-down how and when data will be converted, all before signing the contract. Don’t forget to draft and send a 90-day cancellation notification to your current provider.

6-months to the go-live date – This is when you begin to prepare your dealership for the switch. Put a hold on manager vacations for the installation period. Everybody needs to be on board and ready to go to minimize business continuity issues.

Communicate the transition plan and expectations to all employees. Employee buy-in is key for a successful conversion. Curtis Horne, a dealership consultant for over 20 years and former Reynolds & Reynolds VP of Sales for the Southern Division, understands that change is hard and employees may need a little push. “Compensation drives behavior,” he explains. “If there is a significant financial benefit, employees will change.”

You can incentivize employees for taking additional online trainings, for hitting major milestones, or for helping slower learners. Money is always a great motivator.

Learn the tips and tricks.

DMS providers are like any other business – they want to make money. If you know a few of their tricks, you can avoid over-paying for services, getting locked-into auto renewals, and giving up too much control over your business. Watch out for the following practices during your negotiations.

5+ year contracts – Many providers offer a standard 60-month contract as if it’s the only option. It’s not. There is the ability to sign a 36-month contract. According to Horne, you should “only accept a five-year term if the offer has clear financial benefits. The market is so volatile and there are so many providers, you don’t have to live with a long-term contract.”

Support price increases – Providers typically increase the cost of support every year. Make sure those price increases are clearly included in the contract so the provider cannot further inflate the cost as time goes on. Horne notes that you can “negotiate getting support locked in with no increases, but you must do it from the very beginning before you sign.”

Terms of installation and training – Make sure you hash out terms for installation and training (the cost plus the number of hours you will receive) in the initial contract. Consider that some people will learn fast, and some will not. Work out an arrangement that gives your team ample training so they can succeed after the trainers leave.

Contract term – It’s a common misstep to not verify when the contract term begins and ends. Typically, the clock starts when the system installation is complete, not when you sign the agreement. I recommend setting a calendar reminder 24-months before the term end. This is a good time to assess the system. Do it again one year before end, and 6-months before end. Then you won’t be taken unaware and miss your window to cancel, if you make that decision.

Contract extensions – Be aware that DMS providers can include an automatic +60-month term renewal when you purchase updated hardware. Don’t accept that. Request in the contract a clause stating that any updated hardware have the same expiration date as the existing contract. Depending on the provider, Horne goes one step further: “I have a termination letter already signed at the beginning of the term so that there cannot be an auto renewal clause. If you’re not paying attention to dates, a contract can be auto renewed for years.”

Bundling services – Some providers encourage you to bundle all your services with them. Everything from internet and phone, to accounts receivable, desking, and employee timekeeping. Dealers can, and do, get held hostage by providers who threaten to shut off access to their systems if they don’t renew. Rather than bundle all your services, take a step back and look at third-party providers. You don’t want to be in a situation where you want to make a DMS switch, but didn’t realize your current provider manages your IT. “Negotiate who controls the network,” says Horne. “Do you really want one provider controlling your entire dealership?”

Document management – Many DMS providers offer electronic document management solutions, but those solutions only work if you use their DMS. If you decide to switch providers, you have to buy the new document management solution. Consider instead using a third-party system. You buy it only once, and many are DMS-agnostic so you always have access to your data, even if you switch providers.

OEM integrations – Your OEM must communicate with your dealership so many DMS providers include OEM integrations. Before you jump to a provider that touts integration with your OEM, ask how many integrations are included. An OEM may have 30 integration points to a DMS, but a provider may offer only 12. There’s no rule that they must offer them all so ask before you sign.

Your DMS touches every aspect of your business, so you should never take a provider switch lightly. Invest the time in analyzing systems and learning negotiation tips and tricks, and bring in outside consulting help if you need it. You’ll significantly increase the likelihood of choosing the best partner, with the best system and terms, for your business today and far into the future.

A recent article in Automotive News showcased how the overall market for DMS software is in flux with disrupters cracking the decades-old duopoly of CDK and Reynolds and Reynolds. NADA 2021 proved the point with as many as 20 companies exhibiting DMS software. If you’re one of the many dealerships who recently signed with a new provider, you’re going to need to buckle up.

As a Comptroller for many years, I know first-hand that changing systems is an tough process. It’s often likened to a heart transplant since the DMS is your central operating system and data repository. Yet, proper planning before, during, and after the transition can make the process less painful and time-consuming, and ensure data retention and integrity. Following are the essential building blocks for the three stages of the transition for a successful DMS conversion.

Before the switch.

Leadership and advance preparation are crucial to a smooth, successful, and cost-effective transition. Ideally, your management team was part of the selection process and are already cheerleaders for the new system. Set the stage with stakeholders and employees with an all-hands-on-deck presentation that emphasizes why a new platform is needed, such as new technology, more flexibility, or better workflow. Also, remember that compensation influences motivation. Providing a bonus for managers for a successful transition can aid with buy-in.

Ask your new provider for detailed information about the training and installation schedule. Typically, it takes three to six months to get on a provider’s install schedule. Take that time to prepare your staff and try to clear calendars of vacation time so that all staff is present. Make training mandatory for all users in your dealership. If they aren’t comfortable, it’s going to be a bumpy ride.

Compile standard and custom forms. Pull the last month of deals and create a list of all the forms you used. Your new provider will need copies of all the forms for programming. Do the same for any custom forms or input fields. Trust me, if you haven’t changed providers in the past five years, you are more than likely using some customized settings, forms, or fields. Work with your Controller to unravel the spider-web of customization; the better you understand your old DMS, the better you will understand your new one.

Review current DMS services and integrations for compatibility with your new provider. It’s not uncommon to have a full turn-key DMS platform that includes server and print equipment, network gear, phone system, internet access, and security applications. A current itemized DMS bill will detail the services provided. If your new platform does not include, or is not compatible, with these services, you will need to research alternate options. The same applies to current system integrations, including your OEM, CRM, marketing platform, desking tool, and more.

Clarify DMS data conversion and DMS set-up. Before the switch, identify what data fields can and cannot be converted. Discuss with your new provider if you need an additional dealer service provider for your archive conversion, and the required format for files. This is also a good time to talk about the COLDing process, including what documents are automatically COLDed, and any costs associated with accessing archived documents. As I wrote about in a recent article, many of the large providers charge hefty fees to retrieve files in the case of an audit, for example. You can avoid this scenario by archiving data to a third-party document management platform before you make the switch. If you do need access to COLD documents in the future, you can access them with a few keystrokes and avoid additional DMS fees.

This is also the time to review and re-evaluate workflow processes. Schedule team talks to discuss what’s working and what’s not. Document the steps required by personnel to book a deal, or the flow of documents from Service to Warranty Administration. You may discover workflow inefficiencies that your new vendor can streamline, or desired automations that can be easily incorporated.

You’ve done your homework, your team has started training, and you’re a week out from your ‘Go Live’ date. Now is the time to ensure your team can re-create in-progress tickets in the new system from start to finish. In-progress tickets may be lost during the switch. Proficiency in re-creating them will save time, reduce frustration, and make for a smoother transition.

During the switch.

As soon as your new system is live, re-create those in-progress tickets and make sure to close them in your old system. Remember, if your old DMS system automatically saved a closed RO or deal to your archiving system, that document will never be converted if it’s left open; even if the RO or deal will be closed in the new system.

Next, COLD your books and perform a full month-end process in your old system. Do this even if it is the middle of the month. Repeat the process in your new system to ensure you have a redundant copy. Compare the reports from both systems for accuracy and to verify that all data fields and reports are appearing as you specified. Same reason for above: if it’s not COLDed, it won’t be converted.

Check that crucial data is being mapped to your new system. This includes HR information such as employment history and payroll, your CRM data, and scanned images of physical documents. Don’t forget your COLDed images, or assume your new provider will automatically convert them. This is typically not included in standard conversions, but your new provider will likely do it for an additional fee, if you request it. If not, identify a 3rd party provider who can perform these non-core DMS data conversions for you.

Most importantly, double-check the day and time your old system will be shut off. Trying to access your old DMS after this date will likely be costly and time-consuming. Even a long-standing relationship with your old provider will not guarantee access.

After the switch.

Move forward with confidence and continue to mentor your teams. Identify those who need extra help and pair them with high-achievers. Request on-site help from your new provider for complicated processes, such as your first payroll and month-end close. Be prepared for employee resistance and stress. Change is hard! Always focus on why you made the change and how it will positively affect employees and the company as a whole. Stay upbeat and on-message to help employees adjust faster.

Switching to a new DMS provider is never easy. But you can make it less painful and time-consuming with proper planning before, during, and after the transition. I recommend following a checklist, such as this one created by the experts at DealerTech, and leaning on your new provider for on-going training and support. Good luck and Godspeed!

Users can use the Vault Key to initiate searches of the One View Vault archiving platform without leaving the DMS screen or other applications.

Indianapolis, IN – January 26, 2021 – One View, an auto industry-specific data solution specialist, announces the launch of the Vault Key search application for One View Vault. Vault Key enables One View Vault users to initiate Vault searches from within any DMS or external application that allows text highlighting; eliminating the hassle of opening multiple tabs and increasing employee productivity and efficiency.

“Our dealer clients requested a faster, more efficient way to find and use information from One View Vault,” said David DeHaven, One View Founder & CEO. “Vault Key is a huge time-saving application that we developed in direct response to their needs. Our goal is always to help our clients easily find and use information more effectively to move their businesses forward. Vault Key is the first of several new products coming soon that meets that goal, while maintaining the highest standards of data security.”

Vault Key retrieves information from Vault documents from within a dealer’s DMS, CRM, credit application, web browser, email, OEM portal, or any application that allows text highlighting. Dealership personnel simply highlight a string of text in an application, press shortcut keys, and a web browser appears within the original application displaying Vault search results.

Dealership employees can search for complex VINs, customer names, stock numbers, and much more, with just a few keystrokes. By eliminating the need to key information into the search bar or jump back and forth between applications, Vault Key saves time and eliminates keystroke errors, while boosting productivity and efficiency.

Vault Key is a complementary search application for the state-of-the-art One View Vault, a browser-agnostic document management platform that is unique as it is compatible with all DMS vendors and suitable for dealerships of any size. Dealerships can securely and easily archive and access their data anytime and anywhere via any web browser.

Thousands of existing customers, including large dealership groups such as Serra Automotive Group, trust their document management to One View Vault. Dealers own their data and have the freedom to utilize it in any manner. It incorporates the highest standards of data security with a user-friendly, mobile-enabled interface that makes it easier and faster for dealerships to archive, access, and retain documents.

All dealership DMS data is sent to One View Vault and between applications using Vault Key through encrypted transmission methods. Databases are backed up redundantly to multiple data centers to ensure business continuity and data integrity.

For more information about One View Vault Key and One View Vault, visit https://bit.ly/2Ntd57D

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About One View

One View has been a trusted partner to thousands of automotive dealers across North America with a broad range of business solutions, including month-end data archiving, document scanning, and DMS data conversions. These solutions digitally capture dealer’s data from any source and provide immediate user access, insightful analysis, and management of their most important asset: their data. A preferred vendor, recommended by major CPA firms, manufacturers, DMS platforms, and dealer groups, One View has built a strong reputation of excellence by showcasing a solid product and a strong understanding of the automotive market. As the only auto industry-specific data solution specialist, One View has aided dealers with electronic data management for over 20 years. As the auto industry continues to move toward a more digital and paperless environment, One View is committed to preparing, consulting, and assisting dealers as they navigate into the data-driven 21st century.

A dealership is a complex organization with a lot of moving parts. With only so many hours in a day, an Owner or GM has to trust the CFO & Controller to handle financials. But as the saying goes: absolute power can corrupt absolutely. Who’s watching the watchman at your dealership?

Of course, I’m not saying that every Controller is corrupt. Far from it. What I’m saying is that a Controller should never perform their job without oversight. Mistakes and temptation grow in a vacuum. A system of checks and balances can stop problems or mistakes before they affect your bottom line. There are at least five things every Owner and GM must do regularly to stay on top of financials.

Monitor cash payments. 

A cash payment is way too easy to slip into a pocket. True, embezzlement is at the far end of the extreme. It’s more likely that a sales manager puts aside a deposit and then forgets to take it to the finance office. Whatever the circumstances, the Owner or GM must keep a close eye on the handling of cash. Mandate the process for collecting and issuing payments is documented and adhered to.

Homework Assignment:

1. Request a weekly DMS report on check payments over a threshold, such as $100. This will eliminate any title checks that are written. You can also start at $0 and work your way up to establish a threshold.
2. Validate that these vendors are on your active Vendor Report and that you have a valid W9 form completed for each. 

Stop overpaying vendors.

You could be paying more for the same service as another dealer in your market. If you suspect you’re being overcharged, speak with your 20 Group and compare pricing. The more worrisome concern is ensuring you aren’t paying fake vendors.

To avoid fraud, overpayment, and duplication of services, audit all your vendors for ROI twice a year. Pull a report from your check register or run a DMS vendor report. Maintain better control over the process by authorizing only one or two staff members to sign vendor contracts. A third-party vendor management platform, that makes it easy to retrieve and review contracts with only a few keystrokes, can streamline vendor management and save you time and money. 

Homework Assignment:

1. Request the listing of all vendors paid in the past 12 months. 
2. Review the ROI of the vendor relationship. 
3. Compare the dollar amount to previous years, as well as confirm the pricing matches the contract signed. 
4. Check that the dealership expense is recorded to the correct Expense account in the books. Review the last three invoices for accuracy.

Keep an eye on floorplans.

Selling cars out of trust is an old story; but not paying off a floorplan debt immediately after a sale is bank fraud and could result in a hefty fine and even prison time. An outside pair of eyes is recommended for reconciling floorplans. A third-party service can receive data directly from the lender and crosscheck it with dealership accounting records to ensure floorplan reporting consistency.

Homework Assignment:

1. Perform your own spot check of Vehicles on floorplan. Request a Floorplan schedule from Accounting that lists out all vehicles with VIN. Have a 3rd party touch each vehicle to ensure you still have it in inventory.
2. Any balance that is less than $10,000 on a new vehicle schedule should be investigated every month with an explanation on why it exists on the floorplan.
3. Review the Used vehicle floorplan schedule for any sold units that still have a balance. This could be incorrectly posted Internal Repairs that showed up after the vehicle was sold.

Perform a regular review of your scheduled accounts.

A monthly or quarterly review of all scheduled accounts will save time during your accountant’s year-end fieldwork and help eliminate potential problems moving forward. Three major areas where balance sheet accounts may not be scheduled and/or detailed are: write-offs, sold inventory, and contracts-in-transit.

All write-offs (customer and factory) should be reviewed and declared monthly so as not to disproportionately affect December income with bad debts incurred during the year but not written off.

Sold inventory schedules should also be reviewed monthly to clear out aged balances and correctly allocate each salesperson’s cost of sales to the month of the sale. A dealer will eat an unwelcomed COGS charge if sales managers are not charged on the cost for the gross amount on a deal.

Finally, commit to weekly reconciliations of the contracts-in-transit ledger. This helps clean up any unpaid deposits before the end-of-the-year and catches mistakes in the deal posting process.

Homework Assignment:

1. Perform your own spot check to ensure all three areas are scheduled and/or detailed in your computer system.
2. Require that any General Journal entry to a COGS account has an explanation. 
3. Mandate that all COGS postings carry the Sales Manager or General Manager signature. For future awareness when reviewing postings, I recommend the use of signatory initials in the description (Example, TP (Travis Peterson)/Internal Vehicle RO Ticket #1234).

Pay attention to irregularities in journal postings

Irregularities can be found in general journal entries, cash disbursements to non-vendors, reconciliation of void checks, and year-end bank reconciliation statements. A final year-end review of the general journal entries is recommended. Most importantly, ensure that checking accounts are not showing any general ledger entries documenting cash taken out. Cash should only be released through a cash receipt or check transaction. Any other method could indicate fraud. Use a third-party tool to analyze your financial standing for any adjustments over $1,000 in COGS, Asset, or Liability accounts, to ensure payments or postings are placed correctly. 

Homework Assignment:

1. Perform your own spot check to ensure checking accounts are not showing any general ledger entries documenting cash taken out.
2. Enlist your external CPA as a third-eye during the year to check on any irregularities, or run a report through your third-party document management platform. 

The watchman, or Controller, has a lot of power and responsibility in the dealership. Don’t expect them to work in a vacuum where mistakes and temptation can hide and grow. Every GM or Owner must do these five things on a regular basis to stay on top of financials, set up the Controller for success, and help their dealership thrive.

A glance into any dealership accounting office reveals a lot of paper. That’s because selling cars creates a LOT of paperwork. Although a “paperless” office may be the holy grail, we’re not there yet.

States require certain paperwork, and they insist you keep it. Retention periods vary by state, but the result is paper deal jackets crammed into filing cabinets, stored in piles of teetering cardboard boxes in unlocked offices, or jammed into storage facilities.

What you end up with is a lot of paper with sensitive customer information that is not secure, is not easy to search or retrieve, and is costing you money – whether via outside storage fees, lost employee productivity searching through boxes, or wasted office space taken over by documents.

However, we are seeing progress. States are revising regulations and reducing onsite retention periods. Most importantly, many are giving the green light to scanning deal jackets, storing them in electronic document storage platforms, and then shredding the originals.

California is the most recent state to revise its regulations. It reduced its onsite document retention period from 18 months to 90 days. This applies to documents related to vehicle purchase, sale, rental, and lease. Paperwork can be shredded after 90 days as long as a dealership has a document scanning solution for digital document storage.

The fact that deals can be scanned and then shredded is huge in terms of cost savings, employee time savings, and efficiency. Deals stored electronically can be sourced, reviewed, and even printed with a few keystrokes. Proper scanning and electronic storage also minimizes the risk of lost paperwork.

Dealerships don’t have to pay for offsite physical storage, or take up valuable office space with filing cabinets and document boxes. That office space can instead be used to centralize accounting teams or for additional employee desks. Wasted space becomes usable space.

It’s also a win for customers. Sensitive information is electronically secure and less likely to be stolen. According to the 2019 Identity Fraud Study from Javelin Strategy & Research, nearly 1 in 15 people were victims of identify fraud last year. Dealerships that can promote secure online data storage have an advantage over the competition.

Are you ready to implement document scanning in your sales department? It’s important to do your due diligence before hiring a document management platform. Make sure to ask these questions:

Is data storage onsite or cloud-based? Cloud-based storage is generally preferred for several reasons. Data is stored electronically on a server which provides data access controls not available when physically storing files. Cloud-based solutions generally have store-level, user-level, and folder-level permissions to minimize the accessibility of data to only the right people. The cloud also offers better resiliency against natural disasters.

What is your data security policy? Ensure a provider adheres to the highest standards of data security. Look for SOC certified providers, which is a standard developed by the American Institute of CPAs to define criteria for managing customer data based on security, among other service principles. All data transfers should be encrypted and databases should be backed up redundantly to multiple data centers to ensure business continuity and data integrity.

Are there safeguards to prevent missing documents? Scanning documents is simple, but it requires meticulous attention to detail. For example, a hidden staple can cause documents to be scanned together as one. Or a page of the deal may be missed altogether. Top providers have built in safeguards to catch these mistakes before documents are shredded. Ask about tools that ensure all deal documents are accounted for and legible before being placed in the permanent electronic deal jacket.

Who owns the data if I decide to end the relationship? It’s long been an issue in our industry that some DMS providers require you to pay hefty fees to retrieve your own data if you decide to sever the partnership. This should never happen with a document management company. The data is yours and should always remain yours. 

What training do you offer? There’s a misconception that scanning documents is a simple clerical task. In reality, the person scanning deals is acting as a compliance manager to make sure every deal is complete and legible before it becomes a permanent record. Look for a provider that offers onsite and virtual training to take the fear out of scanning and ensure the job is done correctly, every time.

Free your dealership from the tyranny of too much paper. Take advantage of changing regulations to explore electronic document storage. Scanning and electronically storing deals increases security, frees up office space, and eliminates the cost of offsite storage facilities.