YEAR END MADNESS
OK, Time to close this thing out. Are you ready?
First, you have to ask yourself some questions, and this is a good time to do it.
- Do my Transaction Reports match my Bank Deposits?
- Is my bank account(s) ready to be reconciled?
- Have I authorized all non-payment transactions?
- Other adjustments.
- Can I account for the entire Inventory?
- Does the Master Inv Report reconcile to the As Of A Date Report?
- Units for Sale
- Units on Hold (Repairs, Demos, Repo Holds)
- ALL Titles in hand or accounted for?
- Valuation Audit. (See below)
- Unit Valuations (ACV) — RECHECK all valuations now! Use NADA Values.
- Does the DMS have the most accurate valuation?
- Are there any that seem suspiciously high or low?
- Re-state value and report to CPA.
- Have any units devalued significantly?
- Report these to CPA with original value and current value.
- Has the Car Lot paid the RFC for all Repos?
- Are there any Sales that seem unusual?
- IRS Compliance:
- Form 8300
- 1099-C and 1099-Misc
- Payroll ready for W2 forms? Fixed Cut-off date?
- Do we need updated W4 forms? (Yes, every year)
- I-9 Forms on file for every employee?
- Do I have outstanding Receivables that need to be settled?
- Do I have outstanding Payables to be settled?
- Have I dealt with, or have a plan to deal with Property Taxes?
- Are there any questions I would have for my CPA?
- RFC: Have I maintained the proper relationship distance with the car lot?
- Do I have a plan to operate for next year?
- Sales Goals
- Financial Planning
- Staff Analysis
- Average unit cost to sell. (AUCS) – See discussion below)
- Is it time to renew my State License?
- Is my advertising fulfilling my needs?
If you do not have a CPA, this is the time to find one. Look for one with used car dealer experience.
This is also a good time to evaluate your compliance with the FTC’s Red Flags and Privacy Acts Rules. Here’s a hint: Just printing the forms is not all there is. Download the acts and see if you are fully in compliance. Get an attorney to assist, if you need it.
Check out your business machine inventory and see if you need to update anything. This is actually a great time of year to buy computers and technology. Remember to go for business-class equipment. Home-use printers and bargain basement computers do not belong in a business. When buying computers, look for those with the Professional Versions of Windows.
Your primary printer should be a network-based black and white Laser printer with Automatic Duplex.
If you only have one computer, consider getting a second one to have on hand in case of emergency.
Check your backup plan. I recommend physical backups (removable hard drives) as well as secure cloud-based backups.
OTHER EQUIPMENT & ASSETS:
Do you own what you think you own? In other words, look at the equipment in the shop, such as tire machines, balances, pressure washers, etc. Make an inventory of these things, and state a valuation of each item. Evaluate the usefulness of each asset and determine if it will need replacement or major repairs during the upcoming year. Be prepared for these kinds of expenses.
If you own lot vehicles such as tow trucks or car hauling trailers, you need to value and evaluate these vehicles, also. If your shop is slow this time of the year, take the opportunity to bring these assets in for Preventative Maintenance work and inspections. Don’t let a $20 maintenance become a $2000 major overhaul. Be prepared to evaluate your cost of ownership vs cost of replacement.
Supply Inventory: What do you have versus what do you NEED? Learning to do JIT (Just in Time) inventory management could save a lot of money. The concept is, by analyzing your usage of a supply, and considering order and delivery time, you should only maintain slightly more of a supply than you can restock. First, by controlling the availability of supplies, you can cut down on theft. By closer monitoring usage, you cut down on waste. And with JIT, you cut down on storage requirements.