Please Help Me Out - On The Numbers
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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SECTION: On The Numbers

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Please Help Me Out

Written By: GARRY BARTECKI

Article Date: 12-04-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.


I guarantee it will be worth your time and effort.

We have some big plans next year to help dealers manage their businesses financially. But as with most plans, if all the parties involved don't participate or take an active interest in the program, the results will never reach the desired levels. About four years ago, we revamped the Cost of Doing Business Survey to provide more detailed departmental, size and location benchmarking statistics. We suggested all AED related training and publications containing financial data be presented using the CODB format with the idea of providing consistent financial data.

The goal was to get dealers and managers to think in terms of the key performance indicators each department needs to consider, and apply those standards to everything they do.

However, even with the positive changes to the CODB, we only get 150 of you to participate, which leaves certain categories lean from a statistical standpoint. The primary reason dealers gave for not participating was that it too too long to fill in the survey.

In response, the AED staff worked hard to automate the process giving dealers the ability to map their trial balance into the survey categories with the added advantage that once you mapped your trial balance, you could simply send subsequent trial balances and AED could automatically generate the survey for the CODB. But, here again only 150 of you participated.

So, AED has kicked it up another notch to give you even more reasons to participate. They will start producing monthly KPI reports to assist dealers in knowing what is happening in the business, how trends are moving and what needs fixing, all using your month-end trial balances, mapped into the AED format at the touch of a button. AT THE TOUCH OF A BUTTON!

You just send your adjusted monthly trial balances and you get the report. We do need a couple of other bits of data to do the calculations, but it's nothing you don't have readily available.

In short, map the trial balance ONE TIME and you get to participate in the annual CODB and receive a customized report that is a GREAT management tool. Mapping the trial balance one time is all that's required to participate in the CODB and the monthly KPI project.

And to make it even easier (I'm starting to sound like one of those knife commercials on TV), the AED staff will help you map the trial balance and audit the results, or at least audit your results to insure it is entered properly. What could be easier?

CEO's, if you continued that hearing participation in the CODB or the KPI project takes too much time, you have other problems, which leads me to my second topic.

It appears the industry is behind the technology curve. Getting a trial balance from a dealer is far too difficult. Having your books closed and adjusted monthly by the 18th of the following month should be a given, but for many of you it's not. Is this the CFO's fault? It could be, but it's probably a combination of lack of time to deal with the issues, lack of knowledge of how technology can work for you, or a general lack of knowledge.

Let's face it, if you don't understand it, you're not going to make a monetary decision concerning material dollars.

Consequently, we've had one of BDO's technical gurus put together a list of simple questions we'd like CEOs to answer. For some of you, it'll take 20 minutes. For others, it might take a little longer. We'll compile the responses and report back to you at the Annual Meeting at the financial planning session on Thursday morning.

The survey can be found at www.aednet.org. Please take time to do it. I guarantee it will be worth it.

So, CEOs you have two jobs to do for me:

  • Get your trial balance mapped so you can receive your personal CODB report and participate in the KPI program.
  • Fill in the technology survey before the end of December. (You can ask your CFO some questions but try to fill it out yourself.)
Thanks for your help and have a great holiday!



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Article Categories:  Financial