A couple of dealership pros offer the benefit of their experience:

Parts manager Scot Strong says, "Two potential problems come to mind immediately - are you remembering to convert gallons to quarts when you receipt a shipment? Is your cost in the computer system per quart or per gallon?

"Possible issue number 2: Look at setups for your DMS system and make sure that your part numbers for oil that you charge out are in a source that relieves the OIL inventory and not the regular PARTS inventory.

"Has this problem been going on for a while or is this a recent occurrence? Any recent changes with your DMS system? Has service added any new labor types recently that might not have the correct setups and are posting to default setups?

"And this may sound a bit dumb, but is your office manager / bookkeeper actually resetting the inventory to match when a discrepancy is found; or is the same discrepancy being carried forward and compounded? Are they assuming that you are fixing it on the physical end to match the books; or are you assuming that they are fixing it on the books end to match the physical and possibly neither is occurring?

"Just some possible scenarios that crop up more often than some might think."

And Dale Macri from ADP suggests, "Try this 3 column form to get started:"

First column - parts inventory

1.  Beginning inventory quantity and on hand this month (from management report).

2.  Subtract total sales quantity and value for the month (sales history inquiry).

3.  Add total receipts quantity and value for month (receipt history inquiry).

4.  Does it match end-of-month quantity and value?

5.  MEMO - number of ROs with oil sold. Should be able to run an op-code report. Don't forget warranty / internal ops.

Second column to the right - do the same from accounting

1.  Beginning of month acct value (acct inquiry).

2.  Sales dollars from account/journal detail.

3.  Receipts from purchase journal detail.

4.  End-of-month value.

5.  MEMO - number of ROs that had oil sold from the accounting detail.

3rd column

Subtract the 5 differences - how does it compare?