ProfitFocus reporting and published dealership data

Recently AADA has been working with Deloitte to understand the system processes and support structures that are in place within eprofitfocus to ensure the monthly data submissions made by Dealers accurately reflect the performance of their business.

Deloitte Motor Industry Services’ data service via eprofitfocus.com has been driving dealership profitability for twenty years. Approximately 850 Dealers across more than twenty brands in Australia actively contribute performance data each month to eprofitfocus.

Within the last twelve months the eprofitfocus reporting platform has been significantly upgraded incorporating the very latest technology and after a period of consulting with Dealers and franchises further enhancements are due to be released and encompass:

  • Departmental reports that can be pushed to managers without the need to log on to the website
  • Users can drill into any area of their franchise or dealership to understand their performance trend, and that of their peers, whilst always maintaining confidentiality around individual Dealer performance
  • Real-time error checking throughout the data upload and input process
  • The ability for multiple users to input data from different sites and easy access to history
  • Greater control over who can access what; for example, the New Car Manager could just access the New Vehicle KPIs and the Fixed Operations Manager access Parts & Service information if so desired
  • Dealers who currently report for several different brands from a common DMS will be able to report all their brands in one single upload.

Why benchmarking is important – driving dealership profitability

Monitoring of Dealer KPIs is the first step in gauging your business performance. In a developed market place, such as the Australian retail motor industry, there needs to be some standard against which KPIs are measured and compared. In fact research is available on the internet which states those businesses which choose to measure and manage their businesses with reference to relevant  KPIs and benchmarks are many more times profitable than others.

A simple benchmarking program can quickly quantify financial opportunities and weaknesses in dealerships. Dealers who then work with their management group or consultants to discuss and determine process best practice and then implement such practices should benefit significantly. In some cases Dealers use the eprofitfocus ‘what if tool’ to quickly identify these potential financial opportunities.

Benchmarking on a consistent ongoing basis can help Dealers gauge how effective their improvements and efforts are over time. As such Dealers can use the eprofitfocus system to download such data over any KPI for a period of time.

Finally, take a moment to reflect back over time: many Deloitte Motor Industry partners can recall the day prior to 1996 when Dealers had to review their numbers in isolation and longed for simple benchmark comparisons. The graph below tracks average Dealer profitability since the inception of eprofitfocus, a regular Australian-based benchmark product, backed by a firm of specialists who care and act for many Australian motor dealers.

deloitte-graph

Accurate dealership data

eprofitfocus utilises Microsoft’s latest pre-eminent release of SQL and the system is overseen by both Deloitte Information Technology Services, who support Deloitte’s worldwide 210,000 employees and Deloitte Motor Industry Services.

AADA asked Deloitte in August 2014 to provide feedback for their September board meeting and stipulate significant system checks to ensure the data received by Dealers is accurate. As such a formal response was tabled for the AADA and it was accepted that the system, processes and data published with Deloitte’s name on it is accurate.

One of the areas explored in this paper was bad data uploaded by dealers and the treatment of it by Deloitte.

Dealer data ‘deemed bad’ is excluded from published data

Bad Dealer data may be the case when a dealership uploads data with extremely high average grosses in used cars, or rent is clearly not charged at all, or is unrealistic when compared to market value.

To protect the accuracy of reported Dealer data there are relevant system checks built-in that exclude the uploading of Dealer data that is deemed inaccurate and is therefore not published in Deloitte statistics.

Automatic identification of such bad data in the monthly upload process will be available to those uploading in real time and easy menu drop downs allow accountants to recompute and fix such anomalies.

The uploading Dealer still can download their individual report but all data associated with this upload is excluded from published data.

‘Reconditioned’ non-Deloitte data in the market

AADA identified several instances where data had been reported as being Deloitte branded in the market place, but it had become clear it was not.

Deloitte and AADA are working together to address this matter and it is important that Dealers and franchises are clear where the data came from when they cite the work of others in the market place.

Dealer Principal self-review of data

The month end accounting process is an important time for all business stakeholders and is a busy time for all. AADA and Deloitte recommend Dealers review the reported profit in their monthly upload to eprofitfocus to ensure it agrees with their own internal management accounts at the time of submission.

Arbitrary allocations

Using your DMS and technology to measure and manage all transactions will give Dealers an edge over others. For example, the setup of detailed general ledger accounts for each sale, gross and expense attributable to each franchise is standard with more sophisticated Dealers. This way an accurate snapshot of each profit centre can be determined all the way down to the last dollar at the bottom line.

As such this method is recommended in developed markets and economies such as Australia.

Where Dealers choose to structure their ledgers more simply, the reporting sales, gross and expense attributable to each franchise can become arbitrary and this could be reflected in your monthly internal accounts and uploaded to eprofitfocus.

Deloitte will continue to work on a number of areas where education may be required and hopes to work with the new Australian Motor Dealer Council on such matters.

Publishing of quarterly high level data by Deloitte in the AADA

Working with AADA, Deloitte has agreed to publish several key KPIs on a quarterly basis. These KPIs will provide a total industry view as well as splits into the Volume, Luxury and

Prestige segments and metropolitan, provincial and rural areas.

This will give greater visibility to all parties on real time actual data. Such data would firstly be submitted to AADA for the new National Dealer Council to review.

Deloitte is committed to developing its services so that they are relevant and valuable to the motor industry, so we welcome feedback on such matters.

Grant Cameron
Partner
Deloitte Motor Industry Services

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