Why Top Talent in the Dealership’s Accounting Office Can Make or Break Your Bottom Line

In an automotive dealership, the focus often falls on revenue-generating departments like sales and service. But one critical, often-overlooked area that can drastically affect the dealership’s bottom line is the accounting office. Although administrative staff don't directly generate revenue, the impact of their performance—good or bad—on profitability is profound.

The Hidden Power of the Accounting Office

Administrative staff are "cost centers," meaning they don't create revenue but manage the essential functions that keep the dealership running. These tasks include financial reporting, payroll, compliance, and cash flow management. Done well, this department ensures the dealership operates smoothly, keeps costs down, and enhances profitability. Done poorly, however, they can cause significant financial drain.

Delays in collecting Contracts in Transit (CIT) can cost the dealership tens of thousands of dollars in interest and insurance each year. Late vendor payments result in costly fees, and missing tax deadlines can lead to penalties that erode profitability.

Why You Can’t Afford to Settle for Average

Many dealerships make the mistake of hiring less experienced talent at lower wages to save on costs. This approach often backfires. An inexperienced manager may lack the expertise to properly manage cash flow, negotiate with vendors, or avoid costly mistakes. The result? The savings in salary are far outweighed by financial losses.

On the other hand, hiring experienced professionals—even at a higher wage—ensures proper cash management, reduced interest expenses, and timely payments. A skilled manager will maximize excess cash through sweep accounts or make money-saving decisions like paying down floor plan balances at the right time.

The CFO Value Proposition

A strong CFO or Controller doesn’t just manage finances—they save the company their entire compensation in avoidable costs each year, if not more. From reducing interest expenses to ensuring tax compliance, their expertise helps safeguard the dealership's financial health and boost overall profitability.

Why Hiring a Consultant Makes Sense

Dealers should consider hiring a consultant to assess the effectiveness of their current accounting staff. A consultant can objectively evaluate whether your team is delivering the best financial outcomes or costing you money through inefficiencies. If your current team isn’t performing optimally, investing in a consultant to identify areas for improvement or new talent could save your dealership tens of thousands of dollars annually.

Written by Travis Hawk, Contract CFO / Controller

Visit us at www.dealershipsupportsolutions.com #TravisHawk #AutomotiveCFO #DealershipSupportSolutions