Do the whole job every day and pay attention to the little things.

Six suggestions:

1. Check the DMS to see what the default settings are for day's supply on hand. Compare the defaults to the depart-ment's real needs and adjust accordingly.

2. If the dealership doesn't have monthly budget reports, they should be instituted immediately.  Ask for help from the general manager or controller on this.

3. Review accounts receivable monthly and make sure that customer credit limits are appropriate. Past dues should be cut off until the account is brought current.

4. Non-parts-department employees should be used to doing bin counts on a regular basis. Have them submit a written report.

5. Account for the numerical control of all parts tickets. Review all voided tickets. Voids should be approved by the parts manager.

6. Parts department internal controls should be reviewed at least quarterly.

Take action on excess parts returns

Returns from installers and body shops are a chronic problem for dealership parts managers and erode profits and paychecks. Here's a letter you can send to all your wholesale customers:

Attention wholesale customers of ABC Auto Dealership:

4  Effective immediately, we are changing our wholesale discount structure. The policy is as follows:

4  For customers who limit returned parts to acceptable levels, additional discounts will be offered; Customers whose returns exceed 14% of purchases will receive lower discounts and will be charged a parts restocking fee of ________. 

We regret the need for these changes. They are necessitated by the decreased profit margins
on OEM parts and by increased inventory losses due to excessive returns.

Thank you in advance for your
cooperation,

                     Sincerely,
                        Parts Manager