Dealer Network: Simultaneous Group-wide Audit
When it comes to physical vehicle audits two of the biggest challenges are scale and speed.
Audits need to be conducted and concluded quickly to be relevant but the bigger the scale the more challenging the process.
We recently conducted a case study with a client that was avoiding conducting network stock audits as it was just too difficult and the timescale to completion (5 weeks) was so long as to make the audits meaningless.
After conducting a 1 day controller and auditor training workshop with 11 of their lead dealership accountants, they were ready to deploy the CheckVentory Audit methodology.
Teams of auditors (mostly admin staff) lead by the accountants blitzed each site armed with nothing more than their smartphones and the CheckVentory Audit app. Every asset on each site was checked with the platform synchronising and reconciling seamlessly. For the first time ever, every vehicle was checked and reconciled to the Group trial balance within 24hrs. 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.
The audit results were incredibly insightful.
- 67 vehicles were physically at dealerships but not showing (anywhere) on the Dealer Management Systems. Identifying major gaps in their vehicle adoption processes.
- 22% of all unseen cars were sold but not invoiced, severely impacting on cashflows
- 37% of all unseen assets were located in a different dealership to the one showing in their DMS, meaning that dealership stock levels and age profiles were significantly incorrect
- 7% of the unseen vehicles were out on demo but were not recorded in the dealership demonstration systems at the time of the audit, identifying lack of control and adherence to company car usage policy.
- 6% of vehicles were adopted and on funding but had not physically arrived. In some cases the vehicles were aged stock that had been forgotten about.
With all audits there are insights but it is only when audits are done comprehensively across networks that assumptions fade and facts emerge. In many cases the insights gained from this simultaneous network audit had evaded previous audits as “Dealer A” had credibly assumed the vehicle was with “Dealer B, C or D”.
This customer has now moved from quarterly audits to monthly simulations audits and is using the results to monitor that the newly improved dealership processes are being adhered to.
Read more about CheckVentory Audit and how it can help your dealership to improve profitability here.