Ensuring an accurate and precise inventory is critical for success
A vital issue for auto retailers and their funding partners is effective stock control. With vehicles selling, and stock changing fast, it can often be the case that systems aren’t always kept up to date, and the vehicles are not where they are thought to be!
This can result in:
· Missed sales opportunities and poor customer service
· Damage to funders’ confidence and reduced availability of credit
· Poor business decision-making based on inaccurate data
And combined, this can have a significant impact on the business performance.
Follow these simple practices to keep on top of your stock and avoid any issues.
1. Conduct a Physical Stock Check
Carrying out a stock audit is probably not anyone’s favourite task; it can be time-consuming, but it is a must even in these days of computerised systems.
With any dealership management software, you need to ensure you have correct and up-to-date information. And, of course, funders will also need to audit the vehicle assets
It’s good practice to get in the habit of regular stock audits. Make a plan and book the dates in the diary. Make sure your team is aware of the task and has the right tools available.
When it comes to physical vehicle inspections, two of the biggest obstacles are time and scale.
Audits must be carried out and completed promptly to be effective, but the more significant the site or dealer group, the more time-consuming the task.
We started to work with a dealer group that avoided and put off the stock audits. As a group of 37 dealerships, it was proving to be a difficult task and taking such a long time to complete that the information was out of date and became useless by the end of the process.
We carried out a one day training workshop with their 11-strong team of accountants, who then oversaw teams of admin staff to run a simultaneous audit across the group. The audit was completed using the CheckVentory Audit app downloaded onto each auditor’s mobile phone.
Every vehicle asset at each site was checked, with the platform automatically synchronising and reconciling.
For the first time, all vehicles were verified and reconciled to the Group trial balance within 24 hours. Any vehicles that were not physically seen on the day (11%) were reissued for follow-up audits in a repeated process until every asset was verified and accounted for.
This massively simplified the audit process for this dealer group, and they were able to use the intelligence gained to improve business processes, increasing overall efficiency.
2. Update Systems and Correct Core Data
Dealership management software allows you to manage multiple processes and see all of your data at a glance. However, the adage that systems are only as good as the data within them applies here.
If your core database isn’t accurate, all the information you get from the system will be wrong. This can result in incorrect decision-making and missed sales opportunities.
Focus on keeping all records are up-to-date and accurate wherever possible. In particular, having completed the physical audit, be sure that any issues and errors are rectified.
3. Make Use of the Intelligence Obtained
Once you’ve completed your audit and updated the systems, it’s time to make use of the intelligence it’s given you.
Firstly, you need to ensure you have a solid plan for the stock. For example, are some of the vehicles aged and slow-moving? Then, if you identify any problems with slow-moving stock, come up with the appropriate actions to address the issue.
Secondly, set about reviewing the anomalies that arose during your audit. Do you need to make process improvements to prevent this from reoccurring? Or maybe there’s an employee training requirement. For example, were stock vehicles found during the audit but not showing on the original stock list.
Whatever the reason for the issues uncovered, getting to the root cause is key to preventing this from continuing.
4. Make More Informed Purchasing Decisions
Coming full circle, to replenish stock the business will need to make decisions about what inventory to purchase.
Sometimes this can be based on an individual’s perception of the right fit for the dealership or ‘history’ in the sense that ‘this is what we’ve bought before’.
This can be little more than guesswork without overlaying the business intelligence that tells you how profitable particular vehicles have been and how quickly certain models have sold.
Making educated decisions will reduce the chance of having slow-moving and unprofitable vehicles in the portfolio.
Take a look at CheckVentory Audit
Our approach is based on a thorough knowledge of the automobile business and the operational challenges associated with monitoring vehicle movements across multi-site dealership networks.
Our cloud- and app-based solution distributes a companywide overview of your inventory at any given moment. Additionally, the AI-powered program combines data from numerous sources to provide a thorough and validated analysis of your portfolio.
This allows for more proactive stock management, maximising sales opportunities and allowing better-informed management decisions.