The role of dealership reconciliation
Car dealership reconciliation, when done in a consistent and timely manner, is an important part of managing the business and ensuring profitability. Because there are so many moving parts and daily transactions, it can be difficult to stay on top of the record keeping practices. Car dealership accounting departments are already managing a large volume of work, and it can be tempting to give reconciliation only a cursory glance.
Putting a good reconciliation process into place, however, is a vital part of dealership financial management, and one of the most effective tools for managing cash flow. Along with handling the complexities of a car dealership accounting system, it provides the ability to catch problems such as input errors, improper or missed tax filings, and fraud.
Fight errors and fraud
When performing a car dealership reconciliation, you can catch errors that were missed the first time around. For example, it’s possible for an employee to transpose numbers when documenting a deposit. The error can be easily spotted when comparing the general ledger against the bank statement.
Other record keeping errors, such as a simple calculation mistake, an entry that has been put in the wrong category, or an omission, can also be caught during reconciliation. Bigger problems, like employee stealing or fraud cannot only be identified, but stopped before they get out of control when the books are kept up to date and all transactions are double-checked on a regular basis.
A better way to do business (and make more money!)
Reconciliation is an effective tool with which to control costs and ensure maximum profits. With these internal controls in place, it’s easy to get an accurate picture of the areas where you may need to decrease spending, work on managing staff, and it’s an accurate tool to map out the direction you want to take the business in the future.
If all of this resonates with you, but feels like an extra burden for your already busy staff, consider partnering with a firm like GYL that has experience and expertise in performing accounting service for auto dealerships. You can place all of your focus on selling cars while the team of specialists at GYL keeps your accounting system running like a well-oiled machine.