Unternehmerkontor GmbH

Knowing what’s really going on at the car dealership

The business structures of a car dealership rapidly become more complex when its brand portfolio expands or new services and locations are added. Since 2012, a special chart of accounts for the automotive industry known as SKR 51 has provided a framework for recording transactions in sufficient detail for business administration purposes. However, the vast quantities of data make it difficult to keep track of the figures that really matter when it comes to corporate performance management at a typical dealership.

Manufacturer software versus dealer requirements

Car manufacturers supply the trade with a vast amount of data and key performance indicators for corporate performance management in their proprietary software systems and benchmarking studies. This means that, despite the standard chart of accounts SKR 51, car dealers – particularly those carrying several brands – must fight their way through a multitude of disparate software systems and analysis tools every day. To complicate matters further, these systems generally only present their car and brand-related data from the car manufacturers’ favoured perspective. Whereas the manufacturers might choose to look in minute detail at sales, discounts and bonuses in terms of one specific model, car dealers are more interested in the sales figures from the various distribution channels and customer groups for managing their sales. In after-sales service, too, car dealers often lack any meaningful figures on important business segments, such as wheel-and-tyre packages or tyre storage, which are compiled with reference to multiple suppliers.

Integrated data for more transparency

With a higher-ranking software solution covering many subsidiary systems and accessing single values through interfaces, data need neither be duplicated nor removed from the original storage location. This principle, whereby each data record only occurs once, is known as the single point of truth. It ensures transparency even within complex structures. This is the principle according to which the Corporate Planning solutions work.

Clarity in management begins with data quality

The sole purpose of evaluations and key ratios is to serve as an effective management tool. Anyone who takes this important function seriously must first think carefully about how the information and key performance indicators required for running the business are produced.

Hence, effective corporate performance management is based on the analysis of the car dealership structures and the data quality, right down to the financial accounting system. This requires having a look at the dealership’s accounting processes. The degree of conscientiousness with which the dealers log their data in the dealer management system is established during the consultation, too. Do they assign customer data correctly to private customers, business customers and resellers? Do multi-brand garages assign their jobs according to brand? Are internal invoices filed in a system that is easy to understand (e.g. vehicle improvements, running costs, extra benefits or goodwill gestures)? How are warranty insurance policies handled in the used-car business? These questions and many others all determine how financial and cost accounting attributes should be transferred by the dealer management system to the financial accounting system, and thus the correct data flow for a consistent corporate performance management system.

In practice, cases arise again and again where these processes are handled completely differently from one branch of a car dealership to the next. What’s more, it is not unknown for the financial accounting evaluations to have nothing in common with those of the dealer management system – those of the manufacturers’ benchmarking studies being different again. The precise financial position of a business often cannot be inferred from any of these. When car dealerships come to realise this, if not before, they should seek expert advice.

Integrated consulting as a success factor for project implementation

In the first stage of the consultation, the managers and the consultant identify the main objectives and key performance indicators for running that particular business. They then analyse the structures, workflows and accounting processes mentioned previously and identify potential trouble spots.

Together, they adjust the data input and accounting processes so that these work well for the car dealership in question while also complying with manufacturer specifications. While the processes are being adjusted and the data analysed, an integrated, comparable evaluation system for the car dealership emerges.

With these standardised evaluations in place, the operational management work begins. In the next steps of the project, the consultant and the management staff implement the Corporate Planning software, configure custom reports for the car dealership and introduce standard workflows for using the software. This new data and analysis system, which has now been carefully built from scratch, is the point of departure for carrying out further steps, such as creating an operational plan, a financial plan and an investment and credit plan. Corporate Planner does all this in one system.

Relevant data, viewed from the correct perspective, provide car dealerships with findings with which they can work efficiently. These data provide the basis for sound decisions, and, in that, a crucial competitive advantage.

Unternehmerkontor is a Sales Partner of Corporate Planning and an expert in corporate performance management in the automotive trade.