4 Min ReadMay 6, 2024

Three Dealership Accounting Woes and Fixes

Three Dealership Accounting Woes and Fixes.

Nothing can steer your auto dealership off course faster than poor accounting practices. And it’s not just about the importance of accurate numbers to chart a course to survival and success.

It’s harder than ever to find qualified hires capable of handling today’s accounting software and reporting requirements. Then there’s the growing complexity of managing costs, accounts payable, accounts receivable, P&Ls and balance sheets.

Finally, skyrocketing rates of cyberattacks against financial data can’t be ignored. It’s never been more important to protect your dealership and your customers from data thieves.

The good news is that dealership accounting woes can be fixed. With the helping hand of new technologies and strategic tactics, dealers can shore up their accounting practices to drive growth, profitability and security.

Woe: Lack of Experienced Dealership Accountants

A significant problem facing many car dealerships is hiring experienced Accountants. And it’s not just the automotive industry. A lack of accounting professionals is a real problem across the board.

Significantly fewer students are selecting accounting as a major. The CPA Journal reports a 7% decrease from 2021 to 2022 in the number of candidates taking the CPA exam. At the same time, an eye-popping 75% of the CPA workforce across the country hit the retirement age in 2020.

With the droves of baby boomers leaving the profession and fewer graduates to take their places, it’s likely that many dealerships won’t be able to find and hire experienced accounting professionals, let alone someone with dealership experience.

Fix: Look to Technology Rather Than People

With the right technology solutions in place, a lack of experience doesn’t have to be a deal breaker. New solutions with advanced technology routinely hit the market to help those in accounting roles keep accurate books and stay on top of reporting. The near-term future of dealership accounting software will be characterized by solutions that are easy to learn, user-friendly, scalable and secure.

Tools powered by AI are also emerging to remove the burden of the more time-consuming tasks, like reconciliations and ledger work, so staff can focus on value-add activities like financial analysis and planning the future and not calculating the past. This makes the role more appealing for job seekers and also increases operational efficiency.

Woe: Rising Cybersecurity Attacks on Accounting and Financial Data

Nobody questions how the internet and advanced software programs have improved efficiency and accuracy in accounting, but technology advances put data on the radar for cybercriminals.

A 2023 Deloitte Center for Controllership poll found nearly 35% of executives said their organization’s accounting and financial data was targeted by cybercriminals within the past 12 months. And almost half of those polled expect the number and size of attacks to increase.

Fix: Carefully Vet Accounting Solutions for Cybersecurity Features

Not every accounting solution is created equal when it comes to cybersecurity. A careful vetting of accounting software needs to consider validation rules, security practices, data controls, document management and strong audit trails.

Also, consider looking for software that enables accounting data to comply with the SAS 70 Type II auditing standard and SOC 2 security standards. These standards developed by the American Institute of Certified Public Accountants are designed to provide a level of rigor that ensures financial data remains secure.

Woe: Growing Complexity of Accounting Reporting

Reporting always makes the list when it comes to accounting woes. It’s a hefty task for a team to regularly navigate the myriad number of reports required to maximize profits,  minimize risk and keep OEMs and lenders happy. Accounting staff also must keep up with ever-changing government and OEM regulations that require new reporting.

It doesn’t help that some software makes it difficult to pull specific reports, create customized views, add and delete columns … and the list goes on.

Fix: Leverage Reporting Capabilities Within Your Dealership Software

While CDK is moving beyond the DMS to the Dealership Xperience Foundations Suite, your software — whether the Foundations Suite or traditional DMS — should do the heavy lifting when it comes to reporting. The right solution will make it easy to configure and schedule the reports a dealership needs, in the required format, to control and analyze the business in real time. In addition, CDK’s new Intelligence Suite takes your dealership reporting to the next level.

It’s worthwhile to take a deep dive into your DMS reporting capabilities — or lean on the solution vendor — to make sure best practices, tips and tricks, and shortcuts are all being utilized. Many solutions can streamline reporting for accounting professionals, if they know where to look.

With too few qualified hires on the market and growing demand for accurate accounting, reporting and data security, dealerships need to leverage technology and new tactics to shore up accounting practices, balance the books, streamline reporting and protect their data.

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CDK Global
By CDK Global
Staff

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