‘Tis the Season of Giving (and Planning)
by Kelly Grossenbaugh
Director, Elevate Services
I’m in shops all the time, working one-on-one to help them understand their business, where they can improve, and how to set actionable goals to get there. Sometimes it’s a process improvement, sometimes it’s training, and other times it’s just looking at their business in a new way. In almost every case, taking a good, deep look at a shop’s data is the priority. That then informs future plans.
Shops often tell me that one of their goals is strong “financials.” But that means different things to different operators: top line revenue, bottom line profits, profitability per square foot, margins, and so on. To achieve whatever financial goal you have, it’s important to understand what is driving that performance.
As we come to the end of 2021, I’m challenging every shop I work with to look at three critical areas of their business:
When you started using your shop management software, you likely went through an extensive configuration process. But times change, and you should periodically review your system settings so they meet the needs of your current environment, your information is accurate, and your team is working most effectively.
Here are two examples:
First, take a look at your Sales Tax Profiles and Tiers. If any tax changes are not reflected in these areas, even a small discrepancy will lead to costly errors for your shop.
Additionally, I advise shops to review Part Code Tables. If pre-stored estimating lines are not configured and utilized properly, you may be mis-categorizing accounts, losing out on potential revenue, or even miscalculating your monthly sales tax.
If there are any glaring holes in your repair process, you likely know about it already. But it’s important to identify someone as the accountable owner of process and pre-set controls. This may be the general manager, or a new role created in the organization. This person’s job is to make sure your shop operates as a team and stays on the same page.
The process owner should be very familiar with security settings and knowing which employees should reopen repair orders, change promise dates or sales dates, or other key activities. Tightly controlled security settings can help minimize reporting discrepancies or accounting mishaps down the line.
When the process owner outlines procedures and best practices, set up reporting to identify (and correct) any exceptions or outliers. This will allow you to address issues early through training or process updates.
Your software solution offers a wide variety of reports to help you understand your business. Two of my favorites are:
- Accounts Receivable Work-in-Progress (WIP), which shows pre-payments that have been received for repairs not yet completed. These can be a liability on your balance sheet until the repair is complete and vehicle is returned.
- On the last day of the month, pull your shop’s Overall Work-in-Progress (WIP), and use it to update any journal entries that will impact your sales reporting.
As you start to audit these areas of your business, you’ll see some things that overlap. That’s great – that shows the impact that the review can have. For example, an exception REPORT can shine light on problems with a PROCESS that can be addressed by adjusting a system SETTING.
Taking a broad, and often critical, look at your business isn’t always easy and takes time. But to paraphrase Teddy Roosevelt, “the best prize is to work hard at work worth doing.” As we approach the end of 2021, NOW is the time to set your shop up for success in 2022.
Here’s to a happy and safe holiday season. Look for more in January about the importance of setting goals.