Business Management is an important part of Network Development function and it largely relies on the financial and operational data submitted by dealers on a month to month basis. This data is used for extensive analysis and detailed reports with the goal of improving the overall strength of a company’s dealer network.
Business Management systems are commonly used by the automotive industry however, it is not a standard practice in all organizations globally. Also, many other industries like Powersports, Transportation and Equipment industries use similar systems sporadically – The key challenge is their ability to collect reliable data from dealers.
Lack of contractual commitment by dealers
Many companies operating in smaller markets do not have requirements to ensure that the dealers provide monthly performance data. The lack of a contractual requirement makes it difficult to ask an independent dealership to provide reliable data.
Mixed operations at a dealership A typical dealer will sell products and services for more than one company. Many automotive and in some cases, Powersports and Equipment companies prefer and appoint exclusive dealers, but most dealers have multiple operations. This makes it difficult for dealers to generate data that can be easily compared across different dealerships. For example, a dealership carrying only one car brand will have different income / expense and profitability measures compared to a dealer selling multiple brands and having additional business on its books.
Lack of correct mappings for data export Dealers will implement a “mapping” process that maps their internal financial data from their internal DMS / Accounting systems to the account / input data required by OEMs. Usually, they generate an extract file from their internal system in TXT / XML format. Incorrect mapping will result in inaccurate data.
Inexperienced accountant / controller The data export process does require an efficient understanding of the company’s requirements in terms of specifics of accounting and reporting. For example, some of the requirements could be reporting performance bonus, expense distribution, calculations of working capital requirement, etc. A new controller may not have a clear understanding of how to implement such requirements and that would lead to inaccurate data from a company perspective.
Staff turnover As it relates to the above. Dealerships experience significant turnover in controllers and accountants, which results in having to hire new personnel who may not have the right level of experience.
Despite the problems previously mentioned, companies can take certain measures to improve data quality. Companies along with their Business Management service providers should be able to implement the following