The dealership’s Administration Department needs a Manager that can maintain strong, efficient and profitable performance.
The Manager’s objectives should be to:
• Have efficient administrative staff
• Lower the administrative cost per sale
• Find the best financing option for purchases
• Keep a strict collection policy and avoid delinquent accounts
Furthermore, in multi-store setups, the dealership Admin Manager must stay on top of the performance of each store, analyze reports to compare their performance, and make decisions to improve the overall business.
Let’s analyze some issues that the Administrative Manager should manage in order to detect mistakes and increase profitability.
Detect employee profitability and efficiency
If the Administrative Department has more employees than needed, its performance will not be profitable for the dealership. It’s the Admin Manager’s job to avoid excess or lack of staff. Overloading employees with too many tasks and keeping several employees focused on fewer tasks are both damaging situations that can be avoided.
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Control average time of collection and payment
The Administration Manager must control the time customers take to settle their debts as well as the payment terms offered by suppliers. If customers are offered 30 days to pay but suppliers give the dealer only 15 days, then the dealership will soon find itself at a financial disadvantage.
Generate business reports
A recommended practice is to regularly generate performance reports of the administrative departments at each dealership store. A dealer that doesn’t have clear and reliable information can’t make decisions to improve the business.
Some recommended strategies
Account suspension. The DMS can be used to suspend delinquent accounts, thus impeding these customers from transacting through the system.
Daily follow-up reports. Performance and efficiency reports help dealers make smarter decisions regarding financing policies.
Centralized reports. Dealers that have more than one store should analyze individualized information for each store. By cross-checking this information, the Admin Manager dealers can detect problems and look for solutions.
Train administrative staff. A trained employee works faster and more efficiently. Dealers can attain higher productivity by eliminating repetitive tasks and improving business processes. One area of focus is the sales administration process, from the moment the administrative clerk receives the transaction folder until the vehicle is delivered to the customer.
“Analyzing and improving the administrative department is essential, since it is the back-office that holds together all of the dealership’s sale transactions.” Jorgelina Perez, Senior Consultant