Where Have We Been, Where Are We Going . . .
. . . And How Are We Going To Get There?
Q What information does an F&I manager need to report to senior management?
A While independent dealerships may be limited in personnel, reports to senior management are constant. Every owner needs to know accurate information about the deals written, the deals delivered, and the contracts in transit.
Senior management needs to be aware of floor traffic (some may refer to this as master ratios). This information should originate with the sales manager, although very often in a smaller organization the master ratio information is filtered via the F&I daily report. The sales manager should review: 1) the number of presentations made to people on the lot (ups); and 2) the number of demonstration rides provided. The manager and dealer need to review the write-ups for customers on the lot and then translate that information into the closing ratio (the number of closed deals compared to the number of customers on the lot for that day, that week, or the month-to-date). This information is useful in determining the topics to be covered during the educational portion of the sales meeting.
F&I departments should be responsible for reporting the status on credit applications, deals delivered and not funded, and titles in transit on the trades. Dealers need to know the status of the contracts in transit to gauge their cash flow. If they are flooring the inventory, the time it takes to cash a contract is critical so that flooring can be paid in a timely fashion.
Production reports that demonstrate the percentage of penetration for sales of F&I products, and profitability, is critical to the growth of the dealership. Reviewing the history is essential to setting new goals. In order to grow, all of us must set a target.
Once the target has been identified, it is then necessary to monitor progress and revise the process while adhering to the standards of honest and ethical business practices.
While some may view reports as a waste of time, the professional recognizes the value of seeing where they have been, identifying where they wish to go, and then making a plan that shows how they can reach their desired destination.
It’s a new year. Have you identified your new opportunities and how to maximize them?
“Kelly’s Korner” Column, Oregon IADA Squeaky Wheel Newsletter, February 2006, p. 10