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By Deal Pack - July 11, 2012
As the owner of a used car dealership, your primary goal is to sell cars, and chances are, that is the function holding your attention, day in and day out. Buy the cars at the auction for a good price, and turn around and get them off the lot. However, the 80/20 rule applies to your business; 80% of your potential problems are going to arise from the one thing you only spend 20% of your time on: the bookkeeping.
The largest potential problem you face when internal controls are lacking is the embezzlement of cash from opportunistic employees. While you’re on the lot with prospects, your employees are the ones taking cash payments from customers, entering them into your dealer management software and keeping track of the cash drawer. There are some very important policies you can implement to ensure all of that cash actually makes it to your bank account. Some of these items may seem simple, but they are all important steps you can take to protect yourself from fraud.
1. Always do the bank reconciliation. I understand it’s tedious, and you may feel that’s why you hired a bookkeeper in the first place, but as the business owner, it’s the first line of defense you can put in place to improve the control over your cash flow. When your employees know you’re overseeing the bank reconciliation, it leaves them little room to skim the cash.
2. Separate responsibilities as much as possible. I know that you may only have a handful of employees on your staff, so it’s easy to let the same person take the cash from the customers, make bank deposits, and cut checks to vendors. However, giving one person too much control also gives them opportunity to cover their theft. If you can’t go to the bank every day yourself, at least make sure you reconcile the deposit slip to the actual cash and checks, and pull reports from your software to make sure the amount matches what was applied to customer’s accounts.
3. Don’t give carte blanche access to your employees in your software. In Deal Pack, you’ll have the ability to restrict the access your employees have to certain areas of the system, to correspond with their duties. There’s no reason for a salesman to see your bank reconciliation, for example.
4. Control your checks, by keeping track of check numbers. Giving your employees access to your check book or stock of printable checks gives them access to remove money from your account. By keeping track of checks used or voided, you can ensure that none get reused or go missing, along with your hard earned money.
In the end, it doesn’t matter what industry you’re in or the size of your company, lack of internal controls is the main reason employees continue to attempt and actually get away with fraud. Protect your bottom line, and keep your dealership profitable by following these simple steps.
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Advanced Business Computers of America (ABCoA) develops and supports end-to-end software solutions for the subprime finance industry. Since 1983,
we have helped automotive dealerships and finance companies eliminate duplication, remain compliant, and achieve success with dependable, all-in-one software and white glove service and support.
Deal Pack is a complete, all-in-one software ecosystem customizable to your exact needs and scalable to your exact size - helping improve your operations, grow your business,
and solve the challenges you face. Whether you are a finance or sales company, multi-entity or publicly traded company handling BHPH or LHPH, operating or capital leases,
internal or external floor-planning, retail, rentals, consumer loans, origination, or seasoned paper, Deal Pack is the dependable software for mission critical operations.
Deal Pack handles all of your business needs transparently – providing you measurable improvements and complete financial control, saving you time,
increasing your bottom line, and allowing you the freedom to focus on your daily operations. Deal Pack is relied upon by thousands of customers across
all 50 states in the United States and six countries around the world. Customers properly using Deal Pack have never lost an IRS audit.
To learn more about ABCoA, visit www.abcoa.com.