Pub. 60 2019-2020 Issue 4

16 Top Tips for Locating Cash in Your Dealership W e certainly are living in uncertain and unusual times. However, there are sound methods that dealers can use to save cash, speed up the cash collection process or delay the payment of cash. Let’s dig in and uncover ways each department can help accomplish or bring to light opportunities. We are going to find that there are areas to identify additional capital in every department. 1. Deal Flow Nowmore than ever, billers and finance and insurance (F&I) producers need to work extra closely in getting the appropriate documents in order to get the deals funded. The importance should be placed on getting the deals booked and funded as quickly as possible. E-contracting and e-signing should be considered during this discussion, especially in light of potential remote purchases and deliveries. 2. Receivables • Contracts in transit (CIT): Collections of CITs needs to be a con- stant focus. Dealers do not want to be in the business of floating their cash. • Warranty & Incentive Receivable: Check schedules to be certain all warranty claims have been submitted, especially any potential aged items. Furthermore, verify that all rejected claims have been resubmitted. 3. Floor Plan • Confirm that all unwinds and dealer trades have been refloored. Remember to consider swapping net checks for dealer trades if it is not already a common practice. • Floor all of the used inventory that you can. • Renegotiate floor plan rates, and have discussions surrounding waiv- ing curtailments and deferring interest payments where appropriate. • Also, continuously monitor payments on sold vehicles to make sure the dealership does not get out of trust. 4. Aged Vehicle Inventory Perform a cost benefit analysis of wholesaling aged inventory. Consider the need to push the wholesale process faster for used vehicles that are not going to turn a profit in your market. 5. Parts Inventory • Check that you have returned your old cores. • Verify that you do not have any open returns outstanding that could By Thomas England, Partner | DHG Dealerships