By Travis Peterson, Product Owner, One View

The phones are ringing off the hook. Your door is closed yet people keep pouring in. You have sales managers asking for their commissions, management wanting the final numbers for the month, a floorplan needing reconciling, and the statement still hasn’t been uploaded to the manufacturer.

I get it – I’ve been there. A dealership’s month-end close process is complex; however, a firm strategy and checklist can put the brakes on last-minute chaos and costly closure delays. You have to remember: proper archiving of month-end records is critical to overall dealership health. If you do not have a clear understanding of how/when you COLD data from your DMS, you may lose access to critical data and not know it until an unexpected audit reveals missing reports that result in hefty fines.

It pays to give your month-end strategy a refresh, and investigate your DMS COLDing processes. The two go hand-in-hand in maintaining accuracy and efficiency, and in ensuring a fail-safe data back-up for auditing peace of mind. Here are a few tips:

Improve your deal flow

It’s common for deal jackets to end up in accounting a day or two after the end of the month, which delays the process. Many also arrive without all of the necessary paperwork to process the deal. The best way to shut down this last-minute scramble for paperwork begins at the front-end with training and enforcement of both sales and F&I managers. A management-approved deal jacket checklist helps with completeness and accuracy. Many dealerships also levy commission penalties for incomplete or late paperwork – which is a great motivator!

Create a month-end schedule and checklist

Sales and F&I must know when paperwork has to be submitted to be included in the current month. Accounting should also have deadlines for posting deals and invoices, and completing other month-end activities. It takes all hands-on deck and a structured plan to close out your books properly and on time.

The first four days of the following month are key for staying on track. Karlie DeVall, CFO of Tim Dahle & Red Rock Auto Groups, offers some great tips for breaking out your checklist and must-dos for each day in a recent article. If you already have a checklist, make sure it lists all key processes, who is responsible, detailed listings, and templates to be completed. Your Controller should be responsible for overseeing and managing activities to ensure the checklist is followed and daily activities get done.

Investigate your DMS COLDing processes

You’re set up to end the month seamlessly so your job here is done, right? Not so fast. Your month-end data and reports need to be properly stored and archived to meet all regulations and protect you in the event of an audit. It’s easy to assume that your DMS is automatically taking care of COLDing everything – but do you know that for a fact?

Too often, a dealership relies on the DMS for fail-safe back-up, only to realize reports are not being saved. You may not even know this is happening until inactive data is needed. Consider the example of a six-store group using one of the DMS giants. It was only when the group’s CPA requested a report and couldn’t find it that management realized some schedules were not being saved to AGRA, therefore not being COLDed to DSDA. They had no insight into the Controller’s actions and no way of retrieving that data. This wasn’t the purpose, of course, they just didn’t know how the process worked!

Proper archiving and documenting best practices significantly increases the likelihood that you will be prepared to pass any type of audit, including OEM. The general trend over the past few years are manufacturers auditing more frequently on a smaller scale as a source of revenue. I’ve written in the past about how proper documentation can help dealerships pass warranty audits. This is just one example of why it’s crucial to investigate your system to understand why and how you COLD reports into the system.

It’s not enough to assume that everything is automatically saved. Every DMS has different rules that must be validated by your Controller. Once the process is understood, the Controller must share that knowledge and train accounting staff so that all crucial documents are retained.

Your Controller should validate the COLDing process monthly to ensure that key reports are being properly archived – most importantly every schedule, journal, general ledger. Without this information, you can be left blind to the details.

Understand archiving costs

Another important consideration is how much your DMS will charge you to access archived documents once a month is closed. Many of the large DMS providers charge hefty fees to re-open a month. In addition to fees, you’ll likely have to work through layers of bureaucracy simply to open your books. This wastes employee time and causes frustration. And when you’re facing an audit, the last thing you need is more complications.

One way to avoid this scenario is to archive data to a third-party document management platform before you close out the month. This way if you do need to access COLD documents in the future, you can call them up with a few keystrokes, avoid additional DMS fees, and speed up the auditing process.

A firm month-end strategy and checklist, coupled with verified COLDing processes, can reduce your close by several days and ensure your dealership data is easily accessible to protect against unexpected audits. Put the brakes on last-minute chaos and poor data archiving now to protect your dealership’s health far into the future.