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Location: Russellville, Arkansas
Latest Activity: on Sunday
Started by Dominic McWhorter Aug 23, 2012.
Started by Rob Hagen. Last reply by Frank Dec 8, 2011.
Started by Mike "BK" Anthony. Last reply by Brad Sutterfield Apr 29, 2011.
He is in Montana. I will be passing this information on to him and let him know you would be interested in helping. I will keep you posted.
Tax time is coming. To the extent I'm not stepping on Gene's toes, I'd be glad to help in some fashion.
Is he in Montana or elsewhere?
I consult with auto dealers, both franchised and independent, BHPH dealers, RV dealers, marine dealers, motorsports dealers and motorcycle dealers. I help dealers to structure their businesses to maximize profits.
I look at sales and grosses and the amount of money required to generate those sales. Then using simple analysis tools I analyze past performances, develop forecasts for the future and track progresses moving forward. Based on the analysis, I develop programs/processes with the dealer to allow his organization to capitalize on the oportunities that are highlighted in the analysis. Simply put, I do what ever needs to be done to maximize the dealerships profit potential.
This inquiry concerns a potential client. I have discussed with him the possibilities of me working with him, and in the process learned of his accounting methods. By the way, he is currently using "self composed excel spreadsheets". He needs lots of help.
Not to further confuse you about inventory and accrual basis vs cash basis, but your home state's Sen Baucus' tax proposal would allow per Kiplinger "More firms would be able to use cash accounting...those with gross receipts averaging $10 million or less in the previous three years, even if they have inventories..."
In other words as of right now cash basis for a company requiring inventories is not allowed. even in Montana :)
If by " he records a sale as cost of the unit minus the downpayment" you mean dealer cost minus downpmt and not actual sales price minus downpmt from the customer then that is very weird and very wrong.
Also, if you aren't the dealer or an accountant then what type of client business are you trying to get out of him--general dealer operations consulting?-- because he needs some serious help all around. What database software does he use or is he strictly self-composed excel spreadsheets?
I have recommended to him he should have a separate Finance Division, discount the contracts to the Finance Company, take the gross in the car company and let the Finance Co. deal with the receivables.
First of all, this in not my operation and not my accountant, this is a potential client of mine. As for the way he accounts for a sale, he records a sale as cost of the unit minus the downpayment (cash in, cash out). The selling price, contract amount and all other details are not considered. As payments are made, cash is shown as "Cash In".
I'm not sure I understand your description of what your accountant is doing..."he uses inventory cost less down payment to determine gross (which is almost always negative). "
That doesn't make sense since the full selling price is gross sales and the downpmt is irrelevant as to the income for book or taxes. Whether you finance 100% of the selling price or require a downpayment, neither the book nor the taxable income to the dealer is affected, only his cashflow is different.
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