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Are Employees Pickpocketing Your Profit?

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The COO of DealerStrong, Harlene Doane, warns that many dealers have employees who are the equivalent of pickpockets and many of the pickpockets are working hard at taking money from the dealer’s profits. Some are intentional about it and some are just taking advantage of YOUR poor policies and procedures because it’s easy. See if any of these seven things happen in your store.

Published in: Automotive
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Are Employees Pickpocketing Your Profit?

  1. 1. Are Employees Your Profit? By Harlene Doane
  2. 2. A person who takes money or other valuables from someone without the theft being noticed at the time.
  3. 3. Some employees are the of a pickpocket. They take advantage of your poor policies and procedures.
  4. 4. Employees are able to make purchases without purchase orders. You require purchase orders, but allow the same individual to match delivery, do invoices, and authorize payments.
  5. 5. The amount of money they take is often if your store operates on a COD basis instead of utilizing vendor credit.
  6. 6. The items are often ordered and paid for in for you to notice or question the purchase.
  7. 7. the number of individuals who can issue purchase orders & make payments. Make sure a person is matching packing slips & invoices to purchase orders for payments.
  8. 8. Numerous employees are able to sign checks or make electronic bank transactions.
  9. 9. If signers of checks aren’t vested in the company, they won’t watch the dollars leaving like you do. As the number of signers, or those with access to your banking, increases so does the opportunity for misappropriation of your money.
  10. 10. Since no one watches your money quite like you do…
  11. 11. Part pricing gets overridden and discounted.
  12. 12. Discounting parts is like a slow tire leak… At first, you don’t notice, but eventually your tire (Gross Profit) goes flat.
  13. 13. Review your part’s gross profit regularly. Look at staff overrides to ensure your staff aren’t abusing the discounts.
  14. 14. Service tickets are closed to coupons, discounts, or other internal accounts.
  15. 15. A coupon runs and never gets removed from the system. Then it becomes too easy to continue giving it to those who shouldn’t have it.
  16. 16. Review your… See if dollars were being written off that were never authorized.
  17. 17. Employees get discounts that you did not approve.
  18. 18. If so… The one who received the service and the one who gave it away.
  19. 19. Cover: 1.) Parts 2.) Services 3.) Vehicle Purchases
  20. 20. Parts are returned for cash.
  21. 21. Say your shop orders a non-inventoried part (Emergency Part) and it turns out to be the wrong one… A runner goes to get the right part. The right part is ordered. (Maybe from a different supplier) What happens to the part?
  22. 22. Since it’s not stocked in inventory, it’s pretty easy for the part to the dealership, be , and the just may not make it back to you…
  23. 23. Sales department policy authorizations are out of control.
  24. 24. A crazy amount of dollars are charged to policy because
  25. 25. Make sure sales management is accountable for those charges through their compensation plan. Complete We-Owe’s on every deal, even those where nothing is owed, and have the customer sign it. Set firm limits on policy authorization in both dollars and who can authorize them.
  26. 26. You wouldn’t like a pickpocket rummaging through your pockets…

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