I know from my time as a Controller that digital contracting sounds like a no brainer for the dealership. The benefits are there: less paperwork, less storage costs, faster funding, and delivering that “friction-less” experience we’re all hearing so much about. It’s no wonder e-contracting is the new popular kid on the block.  

I believe e-contracting and the paperless dealership are the future, but rapid growth will take time. Dealers and solution providers are still trying to get comfortable with how to integrate solutions, keep costs down, and manage the process. A smooth, paperless experience is hardly widespread or the norm yet for dealers.

As a recent Ward’s Auto article put it, e-contracting is already here. But it’s a fractured process and dealers are setting themselves up for failure if they expect plug-and-play solutions. 

The e-contracting landscape right now is like a game winning strategy without a playbook. Sure, it sounds great in theory. But how do you put it into practice? The dream of an entirely digital solution takes more work than expected and implementation can be messy. If your dealership is considering signing on to an e-contracting solution, review these factors first:

The process. The promise seems to be that e-contracting technology will give you a consistent process for every deal. That’s rarely true. There is efficient e-contracting for parts of the process, but when you get to additional paperwork like manufacturer incentives, warranty documents and DMV or regulatory documents, the process is still manual. States also vary on which documents they will accept with an electronic signature.

Your bandwidth. Do you have the people and the technology to implement e-contracting? You may have to make a large investment to upgrade your systems. A large auto group has plenty of money and people to throw at the problem; a five-store group may not. This reminds me of an article I read about Elon Musk needing 200 people for a project. His company hired the people in two days, but it took 50 people to hire them and another 50 to on-board them. My point is that the behind-the-scenes work and employee time are hurdles dealers still must clear.

Bumps along the road. As interest has spiked, more large dealer groups are giving e-contracting a try. But it’s not a smooth road. Proctor Automotive in Tallahassee, Florida, brought on a digital signature solution that, in theory, collected a digital signature once and then applied it to all the necessary documents. It took 18 months for the signature product to work as expected.

Your customers. Not every customer will be comfortable signing digital documents. A true friction-less experience means meeting customers where they are in their personal buying journey. Asking customers to purchase only one way is a great way to create friction. Don’t ignore what your individual customers want. Serra Automotive, for example, uses its digital finance solution to create forms, but very rarely do customers choose to use the iPad to sign contracts. Instead, paper deal jackets are scanned and saved to the cloud via a third-party document management platform.

In a recent article on modern retailing, author David O’Brien hit the nail on the head when he wrote that no matter what technology you use or how you describe it, dealerships are still built on people dealing with other people. Meet the needs of individual customers and monthly profits will increase.  

E-contracting can be another tool to meet those needs, but there are still hurdles to clear. Consider all the factors before you buy into a game winning strategy that may not yet offer the playbook you need to succeed.

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!

The phones are ringing off the hook. Your door is closed yet people keep pouring in. You have sales managers asking for their commissions, management wanting the final numbers for the month, a floorplan needing reconciled, and the statement still hasn’t been uploaded to the manufacturer.

I get it – I’ve been there. The dealership month-end close process is complex; however, a firm strategy and checklist can put the brakes on last-minute chaos and costly closure delays. You have to remember: proper archiving of month-end records is critical to overall dealership health. If you do not have a clear understanding of how/when you COLD data from your DMS, you may lose access to critical data and not know it until an unexpected audit reveals missing reports that result in hefty fines. 

It pays to give your month-end strategy a refresh, and investigate your DMS COLDing processes. The two go hand-in-hand in maintaining accuracy and efficiency, and in ensuring a fail-safe data back-up for auditing peace of mind. Here are a few tips:

1. Improve your deal flow.

It’s common for deal jackets to end up in accounting a day or two after the end of the month, which delays the process. Many also arrive without all of the necessary paperwork to process the deal. The best way to shut-down this last minute scramble for paperwork begins at the front-end with training and enforcement of both sales and F&I managers. A management-approved deal jacket checklist helps with completeness and accuracy. Many dealerships also levy commission penalties for incomplete or late paperwork – which is a great motivator!

2. Create a month-end schedule and checklist.

Sales and F&I must know when paperwork has to be submitted to be included in the current month. Accounting should also have deadlines for posting deals and invoices, and completing other month-end activities. It takes all hands-on deck and a structured plan to close out your books properly and on time.

The first four days of the following month are key for staying on track. Karlie DeVall, CFO of Tim Dahle & Red Rock Auto Groups, offers some great tips for breaking out your checklist and must-dos for each day in a recent article. If you already have a checklist, make sure it lists all key processes, who is responsible, detailed listings, and templates to be completed. Your Controller should be responsible for overseeing and managing activities to ensure the checklist is followed and daily activities get done.

3. Investigate your DMS COLDing processes.

You’re set up to end the month seamlessly so your job here is done, right? Not so fast. Your month-end data and reports need to be properly stored and archived to meet all regulations and protect you in the event of an audit. It’s easy to assume that your DMS is automatically taking care of COLDing everything – but do you know that for a fact?

Too often, a dealership relies on the DMS for fail-safe back-up, only to realize reports are not being saved. You may not even know this is happening until inactive data is needed. Consider the example of a six-store group using one of the DMS giants. It was only when the group’s CPA requested a report and couldn’t find it that management realized some schedules were not being saved to AGRA, therefore not being COLDed to DSDA. They had no insight into the Controller’s actions and no way of retrieving that data. This wasn’t on purpose of course, they just didn’t know how the process worked! 

Proper archiving and documenting best practices significantly increases the likelihood that you will be prepared to pass any type of audit, including OEM. The general trend over the past few years are manufacturers auditing more frequently on a smaller scale as a source of revenue. I’ve written in the past about how proper documentation can help dealerships pass warranty audits. This is just one example of why it’s crucial to investigate your system to understand why and how you COLD reports into the system.

It’s not enough to assume that everything is automatically saved. Every DMS has different rules that must be validated by your Controller. Once the process is understood, the Controller must share that knowledge and train accounting staff so that all crucial documents are retained.

Your Controller should validate the COLDing process monthly to ensure that key reports are being properly archived – most importantly every schedule, journal, general ledger. Without this information, you can be left blind to the details.

4. Understand archiving costs.

Another important consideration is how much your DMS will charge you to access archived documents once a month is closed. Many of the large DMS providers charge hefty fees to re-open a month. In addition to fees, you’ll likely have to work through layers of bureaucracy simply to open your books. This wastes employee time and causes frustration. And when you’re facing an audit, the last thing you need is more complications.

One way to avoid this scenario is to archive data to a third-party document management platform before you close out the month. This way if you do need to access COLD documents in the future, you can call them up with a few keystrokes, avoid additional DMS fees, and speed-up the auditing process.

A firm month-end strategy and checklist, coupled with verified COLDing processes, can reduce your close by several days and ensure your dealership data is easily accessible to protect against unexpected audits. Put the brakes on last-minute chaos and poor data archiving now to protect your dealership’s health far into the future.

Electronic document storage is now becoming the rule rather than the exception at many dealerships – and for good reason! The benefits are far reaching: from enabling easier audits to ditching jam-packed filing cabinets.

Yet as with any big change, there are speed bumps. The biggest obstacle is the lack of an official dealership scanning process.

Too often, this job is seen as simply clerical and assigned to a $10 an hour temp or piggy-backed onto the existing tasks of an overtaxed employee. This is a mistake.

The truth is, the Scan Operator acts as a compliance manager as he or she is responsible for ensuring every document in a file is legible, in the proper order, and labeled correctly. Sloppy scanning that results in missing pages or illegible information could result in thousands of dollars in fines if auditors come calling.

Sloppy work may also affect sales managers who want to review a previous deal to provide the best customer experience to a returning customer. The same applies to service managers who want to see previous service history to help with up-sell opportunities when a customer is back in the service bay.

Proper scanning matters – a lot. It’s well worth the time and money to hire a detail-orientated professional and provide hands-on training of the full document flow and scanning process. Skimp on the hiring process and training and a Scanning Operator is likely to make these common missteps:

1. Failing to validate that every image is clean - Every scanned document must be legible and clear before it is added to permanent electronic storage. Tried-and-true rules must be followed, such scanning drivers licenses in color or ensuring there are no folded corners in the documents. The Scan Operator must check the screen after every scan to ensure document integrity.
2. Failing to correct incorrect titles - Mis-titled scans create a load of unsearchable documents. Sometimes it’s a simple smudge on a page that causes the system to misread and misspell the title. The Scanning Operator must always check the documents against what’s on the screen to make sure the title is accurate.
3. Mis-collating documents - Assembling documents in the wrong sequence can lead to an incorrect document title which makes the documents unsearchable. Additionally, ordering the pages are key for optimal use – you do not want to scroll though pages to find the 1st page of an RO or a Deal Recap sheet.
4. Scanning multiple documents together - Failure to use separator sheets or not paying attention to ensure documents are separated may cause multiple documents to be stored under one title. This creates a big issue when trying to find those misfiled documents.
5. Forgetting to number pages - All pages in a document should be counted and numbered before scanning, and then compared to what is on the screen. Missing this step runs the risk of not scanning every page.
6. Immediately shredding documents - Scanning and then immediately shredding documents runs the risk that a scan will be incorrect and there is no way to fix it without the originals. Correct policy is to check the system the next day for documents scanned the day prior, to ensure accuracy before shredding.
7. Failing to remove staples - Staples increase the likelihood of missing a page as one may be “hidden” behind another, resulting in an incomplete file. More importantly, staples may scratch the glass of the scanner. Scanners can cost upwards of $5,000 and a scratched glass can ruin that investment by causing lines on every page.
8. Improper scanner maintenance - Like any equipment, a scanner requires proper maintenance to get the best image quality and functionality. The Scanning Operator should clean the glass daily and clean the paper chute, rollers, and sensors once a month. Page rollers should be replaced annually or every 200,000 pages, whichever comes first.
9. Scanning without document knowledge - The Scanning Operator should be able to identify Service, Parts, Deal, and Accounting documents. After all, if they can’t identify the document how can they make an intelligent decision about how to organize it? Proper identification also ensures they know who to approach in the dealership if information is missing or they have questions.

Electronic document storage is a game-changer when it comes to breezing through audits, enhancing employee efficiency, and getting rid of towering boxes of paper. However, don’t trust scanning to a temp or low-level employee. It pays to hire a professional and invest in training because proper document scanning is the linchpin of a successful storage program.

Cyberattacks are becoming a common problem and lost productivity due to a cyberattack is a huge blow to any business. Here at One View, we are aware of at least 5 dealer groups in just the last six months that were impacted by cyberattacks. One group with 25 stores and over $80 million in annual revenue lost all access to their computer network for over a week.

Dealers think in terms of revenue and productivity time. With 72 working hours in a week and $80 million in annual revenue, a dealer group of this size could stand to lose over $1.8 million in a week’s system outage. That’s $25,000 per working hour. Not to mention the additional time lost catching up on data input for services provided during the outage.

You can avoid a loss like this with proper precautions. However, few businesses are perfect when it comes to data information and security. If your head of IT is a parts manager who knows how to install Google Chrome, it’s time to step up your game.

Along with lost productivity, dealerships who suffer cyberattacks may face a steep price tag of remediation costs, fines and civil penalties, loss of revenue, legal fees, and class action lawsuits.

Security concerns in dealerships are nothing new. Dealerships collect and store a ton of sensitive customer data that is very attractive to cyber criminals. What has changed is an uptick in risk as criminals seek to capitalize on the chaos and remote-working scenarios caused by the COVID-19 pandemic.

Most commonly, a criminal sends a “phishing” email to an employee who clicks an embedded link or opens an attachment. That gives access to your system where an attacker can install malware, ransomware, or intrude on your network. The results can be disastrous. Loss of productivity, inability to close deals, theft of funds, and customer identify theft, to name a few.

The sheer number of different strategies and ways to access your system boggle the mind. You can see a list here. There are a lot of people out there spending a lot of time trying to breach systems. It’s clear that you need to be proactive in defending and securing your network.

Cyber security deserves to be a full-time job because there is so much at stake. Yet, according to Total Dealer Compliance, only 30 percent of dealers employ a network engineer with computer security certifications or training. The first step is to legitimize an IT-directed position by establishing an internal cybersecurity role or engage with a third-party IT services provider to provide this service.

As a leadership team, you need to maintain and regularly review your dealership’s Business Continuity Plan. This is a must-have in this age of unprecedented cyber security threats. Ensure the plan not only addresses cyberattacks but other disruptions such as an internet outages or unexpected loss of DMS access.

If your DMS is compromised, you’ll struggle to process payments, close deals, and log service tickets. Have a stock of paper documents reserved so that you can continue to do some business.

Consider storing files in a secure centralized place rather than on your company’s network. If an attacker gained access to your network they could steal business files and customer information. An electronic document management system is equipped with strict controls that allow you to choose who can access files. These systems further prevent attacks with secure cloud servers with firewalls and cybersecurity tools.

A cloud-based solution for your on-site phone system is also a good safeguard. Phone hacking is common and often overlooked. A hacker with access to your phone system can easily tap lines and access call recordings to steal sensitive customer information, including social security and credit card numbers.

Make redundant systems a part of your plan. Back-ups of Active Directories and internal servers allow you to worry less about losing files due to a hacker. A redundant internet supply can keep you up and running if your primary provider is compromised. If there are multiple buildings on one lot, ensure a fiber connection between buildings to minimize risk while transferring data.

Educate your employees on new and popular cyberattack strategies. This is especially important if you have employees working remotely due to COVID-19 concerns or lock-downs. People who aren’t used to working from home may not recognize attempts to breach security. Search for online security awareness training, which teaches employees how to spot and deal with social engineering attacks like phishing emails.

Other areas to be aware of include securing customer data. Make sure your dealership is following Payment Card Industry Data Security Standard compliance requirements and Red Flag Rules. Educate employees on how to create the most secure passwords, and do spot checks daily or weekly to make sure no one is leaving sensitive customer information on-screen or on-desks unattended.

The question isn’t “if” but “when” a hacker will attempt to compromise your dealership systems. Don’t allow them to succeed. Use a low-privilege IT environment, update your Business Continuity Plan, train employees, and lean on outside cloud-based services to keep your network secure, your employees productive, and your customer information safe. 

It is NADA time again! While this year’s show may look different, it still is the best opportunity to discover and explore technology solutions to successfully run your business.

Every dealer’s “must learn more” list should include digital document management technology. The auto industry produces a lot of paper. All those documents take up valuable office space, and/or cost you money to store off-site. Digging through boxes to find a deal jacket or repair record wastes employee time. 

Paper files are also a liability. It’s estimated that 1 in 20 paper documents go missing. With the proper paperless system in place, documents are scanned, filed, and tagged, for the ultimate in security and risk mitigation. 

Need a document? It takes only a few seconds to type what you need into a search bar. Online storage also means you can retrieve an entire list of documents at once, documents can be accessed anytime and from anywhere, and there is no risk of misfiling pulled documents once they’ve been accessed.

The benefits are obvious, but how do you choose the right vendor partner? Before you visit a virtual NADA booth or jump on a Zoom call, make sure you familiarize yourself with the nine essential components of any document management solution: 

1. Breadth and depth. A vendor should handle documents from every department – not just accounting or service. Look for a solution with deep archiving abilities, the expertise to tackle any document challenges, and the ability to convert data from a wide range of software and hardware systems.
2. Customization. Your dealership has unique processes and requirements. Make sure a solution can be tailored to your needs (including custom folders) and preferred input devices (like scanners and smartphones). You want a flexible provider who tailors to your preferences, not the other way around.
3. Integrations. Third-party vendors are an essential part of your business. Ensure a solution can work with you to pull data records and integrate with vendors of your choosing.
4. DMS-Agnostic. A solution should be able to work with any DMS so that if you choose to move to a new DMS, your document storage continues uninterrupted. This is also essential for dealer groups that use multiple DMS vendors and require a consistent view of data via the corporate office.
5. User access and security. You want a system that allows full control over user administration. Look for systems that allows unlimited users, provides security controls over stores/folders, and provides the ability to lock access remotely to certain IP addresses.
6. Customer support and training. Ask about the implementation process and continued technical support. Training is also key, especially for your Scan Operator. Scanning documents is simple, but requires meticulous attention to detail. A vendor should offer plenty of training options to ensure your team hits the ground running.
7. System safeguards. Top vendors have built in safeguards to catch mistakes like missing documents or documents unintentionally scanned together, before documents are shredded. Ask about tools to ensure all deal documents are accounted for and legible before being placed in the permanent folders.
8. Exit costs and data ownership. Insist a vendor include exit costs in the initial contract to avoid surprises should you decide to change vendors. 
9. Dealer referrals. During the sales process, ask for at least three customer referrals for dealerships that are approximately the same size as yours. Don’t skimp on these calls. You want to make the best partner decision now to avoid the hassle of switching vendors later, if your first choice is not a best fit. In addition, discuss the vendor with your 20 Group. They may have insights that didn’t come up during your sales conversation.

The “paperless” dealership is coming, and it’s easy to see why. Scanning and electronically storing documents increases security, frees up office space, enhances employee productivity, and eliminates the cost of offsite storage facilities.

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.