|For many independent dealers, creating, organizing and staffing their accounting office is a real headache. Finding competent, reliable staff can require more time and expense than is profitable to invest. If you find yourself in this situation, then consider outsourcing. Outsourcing is a trend in today’s competitive business environment and with good reason, because it is more profitable than providing the service yourself.|
What exactly is outsourcing? Outsourcing entails hiring companies that will provide a service you require, better and more economically than you could provide it for yourself. Imagine having an accounting department housed outside your dealership, that processed bills, issued checks, handled payroll, tax deposits etc. in a secure environment with complete accountability to you, the dealer/owner. Technology is available today that makes this scenario a viable reality. When well implemented, outsourcing will function as a part of your dealership providing timely services that let you focus on selling cars and making money.
Who should look at this alternative? Independent dealers who: have difficulty finding a quality bookkeeper that is knowledgeable of the car business; are starting up and require economic and quick setup; want to invest their valuable time and resources focusing on sales but still see the value in accurate, timely financials; strive for professionalism, order, compliance and consistency in their dealership.
Imagine, no more hiring and firing of personnel. No vacation time, sick time or personal time to deal with when you have deadlines. Valuable office space and equipment requirements are reduced or eliminated. You have more time to buy, sell and/or collect accounts. No more payroll tax expense (a hefty savings of almost 8 percent) or employee benefits. Never worry again about employee turnover, training or loyalty. We have all heard about embezzlement and/or misappropriation of funds at dealerships, often in massive amounts. Outsourcing provides an attractive system of checks and balances which significantly reduces the possibility of employee theft.
The benefits are great, but I can see that you are still a little skeptical. Companies have been outsourcing some functions for years, payroll for instance. Payroll processing companies issue checks, make tax deposits and complete required paperwork regularly. Such services process your payroll taxes, yet you are still required to prepare the data and in most cases input the data, leaving you with the most time consuming part of the job. These payroll services have value in that you rely on your critical information being handled properly and securely. Outsourcing accounting goes several steps further by eliminating the data entry, providing the controls and assuring good financial information in a timely manner. Similar to payroll services, your dealership gains the experience and expertise of the provider at a fraction of the cost of an in-house accounting department. Such expertise assures that your transactions are posted in a manner consistent with proper dealership practices and the resulting financial statements are representative of your business. Outsourcing your accounting department is taking the next logical step in providing reliable resources for important tasks which require special attention.
For outsourcing to be successful at your dealership, you should ensure that each vendor considered has the necessary experience in dealership operations, accounting requirements and management within the automotive industry to provide the services you seek. Auto industry expertise is the key ingredient required to realize all of the benefits of outsourcing. You should treat finding a company to outsource much like hiring a new employee, interview them, look at their resume, call references and then decide if they can provide the service you seek.
Outsourcing is not for everyone; it is a means of solving a problem. If you experience any of the problems mentioned above or just don’t want to deal with managing an accounting department, then outsourcing may be a viable alternative that will save you money and make your life easier. It’s worth checking into.
Vol 2 Issue 10
Nissan made the Sentra America’s most affordable lease vehicle in January and lowered the average cost to lease a new Altima by 20%.