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Automotive Accountants' Forum Presentation: 22 June 2010
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Automotive Accountants' Forum Presentation: 22 June 2010

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Another fantastic Colledge's Automotive Accountants' Network Forum with subjects including Salaries (across the dealership), Service Department analysis and Internet Marketing.

Another fantastic Colledge's Automotive Accountants' Network Forum with subjects including Salaries (across the dealership), Service Department analysis and Internet Marketing.


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  • 1. Automotive Accountants’ Network Forum Meeting 2 Tuesday 22 June 2010 Founding member of
  • 2. This presentation has been prepared by Colledge’s for the general information of its clients and forum attendees. While the information herein has been prepared with all reasonable care and derived from sources believed to be accurate, no responsibility or liability is accepted by Colledge’s or any of its affiliations, for any errors or omissions, including liability to any person of negligence or otherwise. Recommendations may not be appropriate in all circumstances and clients must consider their own personal objectives and financial advice before acting on recommendations in this presentation. Colledge’s (ABN 52 439 950 641) For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 3. Why are we here? • Maximise outcomes for Dealership Accountants • Professional & Personal Development • Networking • Keep up-to-date For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 4. House Rules • Ask questions • Respect for presenters and colleagues • One discussion at time • Phones to “silent” • Have fun! For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 5. Agenda 1. 2010 Federal Budget Review 2. Salary surveys 3. Service Department 4. Best ideas – member presentations 5. Internet marketing For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 6. Whiteboard Items a. Service staff incentive structures Raoul b. Capricorn Society Ltd Hartley c. Salary comparisons Antony d. Consumer Credit Act Colledge’s Additional items? For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 7. Quote for the day With the start of a new Financial Year... “Every day is a new beginning. Treat it that way. Stay away from what might have been, and look at what can be.” Marsha Petrie Sue Keynote Speaker For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 8. 2010’s Budget Review Federal For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 9. Federal Budget Review (2010) Individuals Tax relief: New thresholds from 1 July 2010 Current % From 1 July 2010 % 0 – 6,000 0 0 – 6,000 0 6,001 – 35,000 15 6,001 – 37,000 15 35,001 – 80,000 30 37,001 – 80,000 30 80,001 – 180,000 38 80,001 – 180,000 37 180,000 + 45 180,000 + 45 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 10. Federal Budget Review (2010) Individuals Standard Tax Deductions 1 July 2010: Optional standard deduction of $500 1 July 2013: Optional standard deduction of $1,000 Includes WRE and cost of managing tax affairs 50% tax discount for interest income under $1,000 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 11. Federal Budget Review (2010) Companies & Businesses 1 July 2012: Company Tax Rate to 28% for eligible small business companies Small business asset write-off to $5,000 limit Small companies: $2M test All other companies: 29% 2013/14 28% 2014/15 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 12. Federal Budget Review (2010) % Superannuation 2013-14 9.25 Increase in the SG rate 2014-15 9.50 2015-16 10.0 Concessional contribution caps for 2016-17 10.5 over 50s to be extended 2017-18 11.0 permanently for those with balances less than $500,000 for 1 July 2012. 2018-19 11.5 2019-20 12 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 13. Federal Budget Review (2010) Economics • Forecast deficit of $40.8b, 2010-11 • Returning to surplus in 3 years • CPI -2.5% 2010-11 2011-12 2012-13 Real GDP 3.25% 4.0% 3.0% Unemployment 5.0% 4.75% 5.0% CPI 2.5% 2.5% 2.5% For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 14. Federal Budget Review (2010) Economics • Inflation within key RBA target • Unemployment expected to keep falling from current 5.3% • Tax revenues from companies and individuals higher than expected increase of 16.2b in 2010-11 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 15. 2010’s Victorian State Budget Review For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 16. Victorian (State) Budget Review (2010) • Payroll tax rate to 4.9% from 4.95% • WorkCover premiums down 3.5% • Motor vehicle duty Threshold $57,466 up from $57,009 (aligned with Commonwealth Luxury Car Tax Threshold) Source: Victoria Budget 2010-11 overview SRO Bulletin June 2010, Gen 1/10 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 17. Salary Surveys 2010 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 18. Salary Surveys 2010 Summary of Findings • Bias to Salary • Salary levels in line with expectations • Car and Petrol main fringe benefit • How to motivate Staff? For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 19. Salary Surveys 2010 • Front end: Skewed to Commission • Bank end: Skewed to Salary • Administration: Salary bias For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 20. Salary Surveys 2010 Front end • Management: Bias to Commission 57-67% • Salespeople: Even split • F&I / Business Manager: Bias to Commissions • Aftermarket: Bias to Commissions For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 21. Salary Surveys 2010 Back end • Fixed Operations Manager: Commission based • Service Manager: Even split between Salary & Commission • Parts Manager: In favour of Commission For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 22. Salary Surveys 2010 Administration • Bias to Salary • Senior positions with Commissions For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 23. Salary Surveys 2010 For more detailed information regarding our survey results, please contact Angelo on 03 9851 6500. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 24. Service Department For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 25. Service Department Questions 1. What do you see as the issues facing the Service department? 2. What is the role of the Financial Controller within the Service department environment? For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 26. Service Department Service benchmarks: 2010 vs 2009 Jan 2010 Apr 2009 Ratio Chargeable : Non-chargeable 1.5 : 1 1.5 : 1 Percent of available hours sold 97.5% 97.5% Labour sales per chargeable employee $14,000 $13,500 Ratio customer parts to labour sales 0.75 0.75 Labour gross per chargeable employee $10,500 $10,000 Salaries and payroll on costs % of gross fixed 40% 40% Total direct expenses % of gross 50% 55% Selling gross per chargeable employee $6,000 $6,000 Selling gross per department employee $3,000 $3,000 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 27. Service Department Service benchmarks: June 2010 AutoTeam Australia vs Accountants’ Group Jan 2010 Survey Ratio Chargeable : Non-chargeable 1.5 : 1 1.6 : 1 Percent of available hours sold 97.5% 105.0% Labour sales per chargeable employee $14,000 $14,145 Ratio customer parts to labour sales 0.75 N/A Labour gross per chargeable employee $10,500 $10,525 Salaries and payroll on costs % of gross fixed 40% 34% Total direct expenses % of gross 50% 62% Selling gross per chargeable employee $6,000 $4,756 Selling gross per department employee $3,000 $2,906 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 28. Service Department Service benchmarks: June 2010 AutoTeam Australia vs Accountants’ Group Jan 2010 Survey Productivity 95% 84.1% Efficiency 110% 124.9% Labour Hours Sold per RO 1.9 2.3 Labour Hours Clocked per RO 1.8 1.9 Customer RO % of Total RO 65%+ 60% Average Prime Cost Labour Rate $18-$25 $22 Average Customer Labour Rate $100 $105 Break Even Labour Rate $60 $53 RO per Advisor Per Day 10-15 8.8 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 29. Service Department Service benchmarks Ratio Chargeable : Non-Chargeable Productive Staff Non Productive Staff Percent of Available Hours Sold (AKA: Proficiency rate or Performance Index) Hours Sold Hours Available For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 30. Service Department Service benchmarks Ratio of Customer Parts to Labour Sales Customer Parts $ Customer Labour Sales $ Labour Sales per Chargeable Employee Total Labour Sale $ Chargeable Employee For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 31. Service Department Service benchmarks Labour Gross per Chargeable Employee Total Labour Gross $ Customer Employee Salary & Payroll on cost % of Gross Salary & Payroll on Costs (non productive staff) Gross $ For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 32. Service Department Service benchmarks Total Direct Expenses % of Gross Total Direct Expense $ Gross Selling Gross per Chargeable Employee Gross $ less Direct Expenses Chargeable Employee For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 33. Service Department Service benchmarks Selling Gross per Department Employee Gross $ less Direct Expense $ Gross $ For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 34. Service Department Refer to this presentation’s Appendix for more Service department information, as originally presented on 19 June 2008. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 35. Now, it’s your turn: “Best Ideas” For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 36. Internet & Websites Being used effectively? For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 37. Internet and Websites • No longer good enough to have a static website • Your website needs to be interactive and regularly updated  Dealership news  Automotive news  Car/model news  Newsletter / BLOG • Content is king For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 38. Internet and Websites Increase exposure, search engine optimisation and customer leads to your website with free internet sites. Social Media Online Directory Listings • Twitter • Yellow Pages • Facebook • White Pages • LinkedIn • True Local • Blogger.com • Hotfrog • Slideshare • Bigroo For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 39. Internet and Websites Analysing your website Google Analytics is free and will provide you with:  How many people visit your website  New vs returning visitors  The pages people are viewing  How long people are staying on your website  Where people are finding your details (Search engines, other websites, direct link)  Bounce rate – people clicking out immediately For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 40. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 41. Internet & Websites What is your Return on Investment? • Beware of over-priced website contractors and set contracts • What is your dealership’s internet spend? • Who’s using Google Adwords?  What is your ROI? For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 42. Internet & Websites Cost saving measures • Ensure website contract provides a Content Management System (CMS) to add content yourself. • Ensure you are not paying and branding external contractors for email enquiries on your website.  Having a CMS will allow you to do this yourself. • Decrease reliance on external search sites for car sales. • Analyse your website regularly. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 43. Goodbye... For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 44. Next Meeting Tuesday 24 August 2010 Venue: The Manningham Time: 12.00noon to 5.00pm For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 45. Appendix Service Department (originally presented 19 June 2008) For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 46. Service Department Technician Performance 1. Productivity% Hours Clocked Hours Available Benchmark 95% 2. Efficiency % Hours Sold Hours Worked Benchmark 110 – 120% For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 47. Service Department Technician Performance Key for measuring performance for each technician and service department on a daily basis. • Productivity: Ability of the Service Department to find work for the technicians. • Efficiency: Measures the ability of the technician to perform the required repairs with the specified time. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 48. Service Department Technician Performance Key Components: - Hours available - Hours clocked - Hours sold - Unsold hours or unapplied time For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 49. Service Department Technician Performance – Discussion Should keep records by type: • Customer Retail • Internal or Used Reconditioning • Pre-delivery • Warranty • RO • Tech • Available from your DMS • Tight workshop controls For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 50. Service Department Technician Performance - Discussion • Total time must be accounted for • Unapplied time to be charged to Cost of Sales • Unapplied time should be a maximum of 5%, benchmark approx 2.5% • Ensure hours clocked to miscellaneous RO is not included in performance. Charge time to Cost of Sales • Ensure that only Applied time is used to measure performance • Ensure WIP is correctly measured – opened ROs only and completed ROs taken to profit. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 51. Service Department Workshop Statistics • Labour Sales per Repair Order (RO) Labour Sales $ Number of ROs • Benchmark $ 160 + customer (depends on labour rate) • Calculate by each type:  Customer /Retail  Internal/Used Reconditioning  Pre-delivery  Warranty For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 52. Service Department Workshop Statistics • Labour Hours Sold Labour Hours Sold Number of ROs Benchmark 1.9 (Customer) • Labour Hours Clocked per RO Labour Hours Clocked Number of ROs Benchmark 1.8 (Customer) For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 53. Service Department Workshop Statistics • RO per day Total RO Work days Actual RO sold per day For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 54. Service Department Workshop Statistics Parts to Customer Labour Ratio Workshop Parts Customer Labour Sales Benchmark 0.75 Indicates the value of parts sold per labour hour. This ratio measures the ability of advisors to up-sell or technicians to identify any extra work required. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 55. Service Department Workshop Statistics Customer Parts $ per RO Workshop Customer Parts Customer ROs Benchmark $65 – $80 Indicates the value of parts sold per customer RO. This ratio also measures the ability of advisors to up-sell or technicians to identify any extra work required. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 56. Service Department Technician Sales & Gross Labour Sales $ Tech/Apprentice (equivalent) Benchmark $14,000 Labour Gross $ Tech/Apprentice (equivalent) Benchmark $10,500 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 57. Service Department Average Prime Cost of Labour Payroll Cost of Labour Payroll Labour hours or (Labour Sales – Labour Costs) + Unapplied Time Hours Available = Average Prime Cost of Labour Benchmark $18 - $25 per hour For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 58. Service Department Labour Rates • Retail $100 - $ 120 per hour + GST • Internal Same as retail • Warranty As agreed with factory • Pre-delivery Same as retail For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 59. Service Department Effective Labour Rates The actual labour rate earned or achieved by the workshop. Assist to understand that impact of efficiency and productivity. Labour Sales $ = effective labour rate Hours Clocked Example: Labour Hours Effective Published Prime Cost Sales $ Clocked Rate Rate of Labour Customer 150,752 1,663 90.65 81 18.70 Internal 37,125 458 81.06 65 18.70 Warranty 14,506 291 49.85 78 18.70 Pre-delivery 39,369 652 60.38 65 18.70 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 60. Service Department Breakeven Labour Sales Service Department Expenses $130,764 Fixed Expense Allocation 20% 47,708 Total Fixed Expenses 178,172 Cost of Sales (Labour) 57,420 Unapplied Time 5,250 Total Expense 240,842 Less Actual Labour Sales 247,392 Difference $ 6,550 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 61. Service Department Breakeven Labour Sales Breakeven reflects the position when the labour sale is sufficient to cover the operating expenses of the Service Department. Breakeven is calculated using labour sales only, excluding sublet, petrol, oil and grease and other misc service sales. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 62. Service Department Breakeven effective labour rates The minimum effective labour rate to achieve breakeven. Breakeven effective labour rate calculation Step 1: Calculate cost to be recovered Service department expenses + fixed expense allocation = Total Fixed Costs Less Gross – Other sales, Sublet, Petrol/Oil/Grease, Other Misc Service Sales = Total Costs to be Recovered For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 63. Service Department Breakeven effective labour rate calculation Step 2: Costs to be recovered per hour Total Costs to be Recovered Hours Available Step 3: Effective Breakeven Rate Costs to be recovered per hour + Prime Labour Costs = Breakeven effective labour rate For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 64. Service Department Breakeven Effective Labour Rates Service Department Expenses $130,764 Fixed Expense Allocation 20% 47,708 Total Fixed Expenses 178,172 Less Gross Other (33,648) Total Costs to be Recovered 144,524 Total Costs to be Recovered $144,524 Hours available 3,352 = Costs to be recovered per hour $ 43.12 + Prime Labour Cost $ 18.70 Breakeven Effective Labour Rate $ 61.82 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 65. Service Department Compare breakeven effective labour rates and effective labour rates achieved Effective Breakeven Profit Publish Customer 90.85 61.82 29.03 81 Internal 81.06 61.82 19.24 65 Warranty 49.85 61.82 (11.97) 78 Pre-delivery 60.38 61.82 (1.44) 65 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 66. Service Department Breakeven Sales Recovery Rate (slightly different to effective labour rate –based on hours available) Total Labour Sales $ Hours Available Example: $247,392 / 3,352 = $73.80 Compare with Labour Rate to Breakeven Measures the minimum average sales per hour to be charged per hour available, that is recover all labour sales For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 67. Service Department Breakeven Sales Breakeven Effective Labour Rate Example: $61.82 (as previously calculated) Rates Recovery Rate $73.80 Labour Rate to Breakeven $61.82 Profit / (Loss) $11.98 For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 68. Service Department Advisor Productivity: RO per Advisor per Day Determines the number of Customers an Advisor deals with per day. Total Customer RO per Day = RO per Advisor per Day Number of Advisors Benchmark: 10–12 ROs per Advisor per Day For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 69. Service Department Parts and Service Absorption Absorption is the ratio that measures: 1. Whether a dealership is front end or back end focused. 2. Amount if back end GP coverage of dealership fixed expenses. 3. Recovery of expenses to open the doors daily. Calculation: Parts & Service GP Fixed Dealership Expenses For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 70. Service Department Included in Fixed Dealership Expenses 1. All department – direct/semi fixed expenses 2. Indirect or fixed expenses 3. Rental and building expenses or rent factor 4. Other indirect expenses For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 71. Service Department Excludes front-end (new, used and F&I) expenses, including: • Salesperson’s salary • Commissions • Delivery expenses • Floor plan expenses • Variable advertising Absorption calculation varies by franchise. Floor plans & Advertising is sometimes included in semi-fixed expenses. For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 72. Service Department Parts and Service Absorption Ratio benchmark • Inclusive of floor plan and advertising 50-60% • Excludes floor plan and advertising 65-80% • Current Benchmark including floor plan 57.5% For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au
  • 73. Service Department Accountant’s Toolkit • Technician Performance • Workshop Statistics • Technician Sales and Gross • Average Prime Cost of Labour • Effective Labour Rate • Breakeven Sales & Breakeven effective Labour Rate • Workshop Capacity • Advisor Productivity • Absorption For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.au Founding member of www.colledges.com.au

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