AUTOMOTIVE & MOTOR RETAIL INDUSTRY:
WHY DO YOU NEED AN EXPERT ACCOUNTANT?
This is a very competitive sector, and there are some complicated additional fiscal responsibilities (red tape), so it is advisable to choose an Accountant who is an expert in this field.
Every successful team needs a mixture of complementary skills; you provide the entrepreneurial drive & ambition, we provide the financial systems & control, along with pro-active practical advice to improve profits and optimise your tax position.
As a critical member of your management team we take care of the Finance side, so you can focus on attracting, retaining and selling more to your customers and building your business’s value, which helps withexit strategies, selling and succession planning.
Successful dealerships are those that are financially savvy. Every strong business has a good eye on sales margins whatever their industry or sector. This means knowing your market to get a good sales price, to buy right and control costs, which are all crucial.
We give you all the numbers that matter, along with trend analysis. VAT advice including the second-hand margin scheme and qualifying cars, help with efficient strategies for key employee remuneration and staff incentive schemes. Because cars, vans and larger commercial vehicles are not cheap to buy, financing the operation is an important consideration, so we liaise with banks and other financial institutions for you.
We can help you to implement accounting and bespoke software packages, including Dragon and Evolution, to help you automate and systemise your operations, so that you can scale successfully.
We want to help you build a business that is not reliant on you being there all of the time, and help you to become a business owner who is able to enjoy more time out doing those things you really enjoy.
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Some of the challenges we help with:
VAT
VAT on vehicle sales is
complicated; you need to
understand when and how much
VAT to charge, so as not to get on
the wrong side of HMRC.
Calculating it often depends on a
good knowledge of each unit’s
previous ownership history.
There are many considerations including: the Second-hand Margin Scheme, Qualifying Vehicles, Part Exchanges, insurance work, imports, exports, recovery and warranty insurances.
Deciding on Facilities
When you start out you may only offer one facility, for example car sales. As they grow many of our clients diversify into service and repair (by starting with getting stock ready for sale), recovery and vehicle hire.
These all have very different business models, so will require very different management and administration skills.
Buying Stock
This is a very competitive marketplace, so buying right is crucial to success.
You will certainly have an advantage if you are able to refurbish or recondition cheaper stock and get units ready to sell, because you will be expected to offer part exchange facilities.
To make good profits you will need to capture and manage reconditioning costs, to afford you the opportunity to recover them when the unit is priced for sale. Most people need some help to systemise the processes.
Quality Stock
Selling vehicles without conducting proper inspections or addressing mechanical issues can result in dissatisfied customers, and potential legal issues.
Ensuring vehicles are thoroughly checked and maintained before sale is crucial for long-term customer satisfaction and building a good reputation. Many clients need help to systemise the processes.
Stock Management
Being successful depends on having the right stock, which is an important balancing act.
Most dealers say they need a good level of stock, so that potential customers visiting the pitch have a good choice, with at least one alternative to the vehicle they’ve come to look at.
This means you need to be smart with your money. Poor stock management can lead to overstocking or understocking vehicles, can be costly in lost sales opportunities and expensive in carrying costs.
You need to regularly review your stock and target sales of the older stock, considering stock values and write downs, to keep stock moving to maximise cashflow. You need help to systemise the processes.
Your Finances Need to be in Shape
Vehicles are not cheap, so you will need good cash and working capital control. You need to get your finances in place to get enough stock to give your customers a good choice and know how to manage cash flow. If you’re not a financial expert, it is good to have someone in your team who can help.
Helping Customers Pay
Being able to give your customers a good choice on how they can pay, can be the difference between making or losing a sale. Most businesses will offer the usual facilities: card machines, accept bank transfers and cash.
Offering finance with the vehicles is a good way to differentiate you from the competition.
You will need to be able to offer good interest rates for those who have strong credit scores, as well as being able to help to customers with problem credit ratings, who wouldn’t otherwise be able to afford to buy what they need.
Benefits include: A boost to your margins - by getting a better price through not discounting financed sales, by financing add-ons such as warranties, recovery and servicing and including these in the price, and getting commissions from finance companies.
Cons include: Finance commission clawbacks, and registration with the FCA, along with regular reports to them to provide these facilities. We can help you with these.
