New Financial FrontiersWritten By: GARRY BARTECKI
Article Date: 06-01-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Dealers need accurate data faster. AED is developing the solution.
You've heard me say and I'm sure you've experienced examples of when "things" are happening faster and faster and you need to make decisions on the spot because you don't have the time to think things through. If anyone can appreciate what I'm saying, it's the CEO and/or the CFO in an equipment dealership. Keeping this urgency issue in mind, the consensus at the recent AED Chief Financial Officer Conference was that executives don't have time to analyze data and only want to know what needs fixing. Knowing what you go through to manage a dealership, the response was not unexpected.
The CFO conference, which was sponsored by BDO Seidman, covered many topics but spent a lot of time on benchmarking and dashboard information AED is developing for dealers. When the question was posed to participants about the type of data a COO or CEO needs, the response was, "Just give me the highlights and point out the areas with problems. I don't have time to analyze a lot of pages to come up with the answers."
There is a definite need for data. There is a definite need for speed. And there is also a need for accuracy. In short, we need answers faster, but they need to be the right answers. That's easy to say, but industry statistics indicate dealers in this industry are behind the curve when it comes to having the horsepower to accomplish this goal. We heard it at the annual meeting in January and we heard it again at the CFO conference.
System vendors supply some sophisticated software to run a dealership's data stream. The problem is that not enough users take advantage of the opportunities offered as part of the package. Dealers are not taking advantage of what they have, and the information that is available is not getting pushed down to the people who could use it.
Thus, dealers spend more time looking for and gathering data, time is wasted doing tasks the system could do, with the required decision making data not made available on a timely basis.
System experts at the convention and the conference agreed that, as a whole, AED dealers are not spending enough on the IT function, and adding my 2 cents worth, I'd say the same goes for the accounting and finance functions, as well.
At the end of the day, it was clear that:
Achieving these results requires faster turnaround of operating results and an accurate drill down analysis to pinpoint areas of concern. The reality of the situation, however, is:
- We need accurate data faster
- CEOs and COOs need dashboards to analyze results
Tough issues in a tough business. Would you be better able to manage your business if you made these adjustments, and even if you wanted to make these adjustments would you know how to go about it?
- We do not spend enough on IT
- We do not spend enough on Finance
- We do not use what our systems offer
- We can't close the books in a timely manner
- CFO's don't have time to help dealers make money
AED recognizes these issues exist and has attempted to expand the CODB to include departmental operating data. Dealers that participate in the survey get to compare their operations against their peers. It's amazing how many people who don't participate in the survey are not aware of what is really in the CODB. They may mean well, but they never get around to studying what the report contains.
Going a step further, AED is moving to a monthly benchmark/dashboard report. If you supply the data on a monthly basis, you'll get a report to help you pinpoint problem areas. There is a lot of effort going into development of this report and from what we heard at the CFO conference there is a need. The problem for dealers will be whether can they provide accurate data by the 20th of the following month.
The time requirement to provide the monthly data is limited to providing an adjusted trial balance. Map the trial balance once using the AED mapping software, and you're ready to go, even for the annual CODB report. If you want to participate in this program, call AED (800-388-0650) to obtain the mapping software so you're ready to use the program when it's ready.
Dealers need accurate data faster.
Dealers need indicators of problem areas. AED is developing the solutions to make this happen. Stay tuned.
[ TOP ]