Table of Contents



BUDGET |11-1 | |SALESPERSON RANKINGS |11-2 | |PROFIT & LOSS REPORT |11-1 | |WEEKLY PERFORMANCE SUMMARIES |11-4 | |

BUDGET

Budgets are financial documents that act as a plan for the amount of income and expenses estimated for a definite period. Most budgets run in conjunction with the fiscal year and are dispatched in early to mid January. Budgets are broken down by month, then quarters, and accumulate year to date until year end.

Typically, budgets are built off previous year’s sales and expenses cross-referenced with standard industry benchmarks.

Parts Department budgets are the number one financial tool used for managing a successful parts department. Department budgets allow management to compare actual sales and expenses with the estimated budgeted sales and expenses. This tool gives the management team the ability to make key decisions based on facts rather than feel.

Goals are an integral component of a successful parts department.

Goal Setting: Management uses budgets as a tool to set monthly, quarterly, and yearly goals that are 5% to 10% higher than budget for sales while maintaining expenses at the budgeted amount. This is just one of the many ways that budgets are used to improve performance within the parts department.

PROFIT & LOSS REPORT

The Profit & Loss Report is basically the report card for the dealership, and the name is self explanatory. This report tells dealership management whether or not the dealership is profitable, and if so, how profitable. As a rule, Profit and Loss Reports are broken into calendar months.

The Profit & Loss Report (or P&L) is divided into three major categories: Sales, Cost of Goods, and Expenses. Lightspeed divides the total dealership P&L up so that each department can see the totals for their specific department rather than the dealership totals.

The sales section of the P&L is a record of the total sales for the parts department for the month to date. This is the total dollar value of all cashiered sales, also referred to as “gross sales.”

The cost of goods section is a record of what the parts (goods) cost the dealership to buy. This is only the cost of the actual parts.

Expenses are anything the dealership had to spend money for other than the actual cost of the parts. A good example of an expense is the shipping that is paid to get parts to the dealership. Payroll and rent are some other expenses.

To see the big picture, the P&L takes total sales for a given month and subtracts the cost of goods to arrive at “gross profit.” This is profit that the department has prior to paying for anything other than the parts it sold. The total of the expense section of the P&L is subtracted from the gross profit section to determine the net profit or loss. A positive number means the department had a profit, a negative number means a loss.

SALESPERSON RANKINGS

Salesperson rankings play a very important part in keeping motivation high in the parts department. As a rule, salespeople are competitive. The ranking system allows them to see how they are doing, and more importantly, how they are doing compared to their peers. The rankings also make it very clear who is performing and who is not.

There are three categories which are judged, dollars per hour, dollars per ticket, and number of tickets.

Dollars per hour is simply the dollar value of what the salesman cashiers averaged over the hours they worked. For example, if a salesman sells $4000.00 and works 40 hours he has a dollar per hour of $100. He sells about $100 every hour he worked. Good salesmen upsell or suggestive sell to increase this number. Bad salesman will simply ring up whatever a customer brings to the counter.

Dollars per hour |  | |

|Rank | |  |

|1 |Philip |$315.82 |

|2 |ADAM |$240.46 |

|3 |Ryan DeLuca |$219.83 |

|4 |Justin Payne |$147.48 |

|5 |Mike B. |$76.30 |

|6 |Sean Siefring |$14.67 |

| | | |

| | | |

| | | |

Dollars per ticket directly reflect how well salesmen are upselling customers. The higher the number, the more the salesman is working to make sure he is selling as much as possible with each opportunity.

|Dollars per invoice |  |

|Rank | |  |

|1 |ADAM |$96.68 |

|2 |Philip |$81.57 |

|3 |Mike B. |$49.23 |

|4 |Ryan DeLuca |$31.52 |

|5 |Justin Payne |$25.62 |

|6 |Sean Siefring |$18.72 |

| | |  |

| | | |

|  |  |  |

Number of invoices is simply a ranking of who had the most invoices. This also paints a picture of who is hustling compared to salesmen who perch behind the counter waiting for customers to come to them. A salesperson who comes out from behind the counter will create more invoices, for more dollars, more often, than one behind the counter every time.

|# of invoices |  |

|Rank | |  |

|1 |Ryan DeLuca |302 |

|2 |Justin Payne |232 |

|3 |Philip |151 |

|4 |ADAM |97 |

|5 |Mike B. |62 |

|6 |Sean Siefring |22 |

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| | | |

| | | |

To generate the overall salesperson ranking for the week, each rank in the three categories is treated as a point value. For example, first place equals one point, second place two, and so on. The points a salesperson earns in each of the three categories are added together and the salespeople are ranked according to their total points from lowest number to highest number, with the lowest point total coming in first place.

|Overall parts salesman rank |

|Average Score | |Overall Rank |

| |Philip |1 |

|2.00 | | |

| |ADAM |2 |

|2.33 | | |

| |Ryan DeLuca |3 |

|2.66 | | |

| |Justin Payne |4 |

|3.66 | | |

| |Mike B. |5 |

|4.33 | | |

| |Sean Siefring |6 |

|6.00 | | |

| | | |

| | | |

| |  |  |

This scoring system is extremely beneficial in that it plays to the competitive nature of salespeople in such a way that it directs their energy towards being more productive. They have a very clear understanding of the criteria used to measure success, and the competitive nature of the ranking system creates a positive synergy within the team. It is also very easy for management to see at a glance how each individual in the department is performing.

WEEKLY PARTS PERFORMANCE SUMMARIES

The weekly summary report is an excellent tool that is used to make sure that there is no misunderstanding what direction the parts department is headed in. By filling out this report weekly, the parts manager is forced to give attention to every key area in his department. This ensures that he is aware of any issues that begin to arise and is made aware of them in a timely enough fashion to take action before anything gets out of hand. Once the form is filled out, a copy is given to the general manager each week as well providing him with the ability to see what is happening in the department as well and coach/correct as needed.

Please refer to the form on the following page.

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While many different accounting software packages are used to run dealerships, Lightspeed is the most common. Dealerships using Lightspeed can follow the instructions on the following page to generate all the numbers needed to complete the form.

Parts Department Weekly Summary Report Locations

(from Parts Menu in Lightspeed)

To get Sales Analysis data: (do this daily)

Sales Breakdown by Category Summary

Other Functions ( End-of-Day Reporting ( Management Reports ( Sales Breakdown by Category Summary

To get Cash Over/(Short) data: (do this daily)

Cash Reconciliation Worksheet

Other Functions ( End-of-Day Reporting ( Cashier Reports ( Cash Reconciliation Worksheet

Method of Payment Detail Report

Other Functions ( End-of-Day Reporting ( Cashier Reports ( Method of Payment Detail Report

To get Salesman Performance Summary data: (do at end of week)

Hourly Sales Report (print to screen)

Other Functions ( End-of-Day Reporting ( Management Reports ( Hourly Activity Report

(include only the following transaction types; Parts Sales Collected Repair Orders, Paid Outs, and Misc. Cash In)

Time Card Detail Reporting

Other Functions ( General Accounting ( Payroll Department ( Lightspeed Payroll ( Payroll Reports ( Time Card Detail Reporting ( P&A Hours Worked

To get Inventory data: (do at end of week)

Inventory Valuation

Print Reports ( Inventory Valuation Summary

Exception Report Status

Print Reports ( Parts Variable Reporting ( Exception Report

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