Car dealership audit tips
If you own a car dealership, you know just how nerve wracking car dealership audits can be, especially if they’re unexpected. Whether it’s an unannounced visit from the IRS, a representative from your state’s Department of Transportation or from your bank, you want to ensure that the process goes as smoothly as possible.
If your dealership does not make compliance a top priority, you’re putting your business at risk for very costly penalties and serious legal trouble that could make it almost impossible for your dealership to stay in business if you’ve violated standard compliance practices and protocols. You could lose the relationship you’ve established with your floor plan companies and could even be at risk for losing your dealer license.
Being prepared for an audit by conducting an onsite compliance audit of your dealership can bring to light any compliance issues and can help reveal long-standing problems that remain unresolved. The result is that you can greatly reduce the risks of being out of compliance as well as upgrade all your internal protocols. Plus, you’ll end up feeling secure in the knowledge that you’re complying with the code of ethics and policies aimed at all dealership departments and their employees.
4 things that the “perfect” dealership does
As Benjamin Franklin once said, “by failing to prepare, you are preparing to fail.” The key to feeling confident that an audit of your dealership will go smoothly is to be prepared. Four tips to ensure that your next unexpected audit is a success are:
1. Monitor inventory
2. Understand payoffs
3. Track vehicle titles
4. Train your team
Compliance training is one of the keys to a successful audit. It’s up to you and your dealership managers to make sure that your teams are up-to-date on any changes in compliance processes or laws. Make training your team a priority when it comes to Red Flag Rules and Form 8300 reporting and that your dealership has effective onboarding for any new hires.
Make sure that you’re prepared next time
Not only do on-site car dealership audits reduce a dealership’s vulnerability to compliance issues by uncovering non-compliant behavior, but they can also help to improve the customer’s experience.
At GYL CPAs and Advisors, we have CPAs specifically for car dealerships with the level of expertise needed to ensure that your dealership is on the right path and that it stays the way.
We can assist you when it comes to navigating the constantly evolving automotive industry with a variety of niche services, including, but not limited to:
- Audit and accounting services
- Compliance auditing
- Inventory controls
- Form 8300 compliance
- Internal control reviews
Our CPAs can help save you the time, stress, and hassle of having to deal with an unexpected audit for which you’re unprepared, not to mention the money that you’ll have to pay in costly penalties if you’re found to be non-compliant in one or more areas.