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by Eric Marcel
When dealers hear the term “Daily DOC (Daily Operating Control),” what comes to mind? Cumbersome? Time consuming? Traditionally, many dealers have delegated the task of producing Daily DOCs to the accounting department, where employees painstakingly entered data and manually calculated totals. The resulting multi-page document was often overwhelming and reviewed on a weekly basis, rather than a daily basis.
Happily, most modern DMS systems have eliminated the need for this archaic process. Yet many dealers still don’t take full advantage of the information the Daily DOC can offer. Today’s Daily DOC is an easy to access tool that shows how much money is flowing into and out of the dealership on a daily basis. Drill down capabilities display every transaction in detail, so dealers know exactly how each line item is comprised. By keeping track of daily totals and printing out trend reports for comparison purposes, dealers can spot potential problems before they affect the bottom line, and also identify areas where profits can be maximized.
Unlike traditional or legacy DOCs, the modern Daily DOC can be printed out on a single Excel-style spreadsheet and can be sliced and diced by department or category, so each manager can get a daily update. Instead of one long DOC that can be overwhelming, many dealers create a dozen DOCs, all for different purposes.
Here are some of the typical Daily DOCs that can be produced, and how they are used to generate profit:
Front End (Sales)
The sales DOC provides an overall sales figure for the day, but more importantly it allows the dealer to see how that figure was calculated. It shows which models are selling (and which aren’t), and what the profit margin is for every vehicle sold. If a dealer decides to put an incentive on a vehicle, they can see how much that incentive is costing them, and the resulting profit generated. These figures help dealers and sales managers to prioritize what their sales goals should be.
Every sales department forecasts what their monthly sales will be, and the Daily DOC allows the dealer and sales employees to keep track of how they’re doing on a daily basis. For instance, if a dealer has forecasted to sell $60,000 of Ford Focus business in a month, the DOC will give a line by line comparison of what was projected and where they’re really at.
In addition to daily revenue totals, a service DOC can be broken down to measure productivity by employee, revenue by type of service, paid and unpaid invoices, etc. Reviewing these numbers might inspire a service manager to offer a special on a particular service in order to increase volume, adjust work hours for technicians, or light a fire under accounts receivable.
If a dealership’s parts department has a wholesale business, the DOC can reveal where the largest profits are coming from; whether it’s selling to body shops, aftermarket shops or even their own service department.
Streamlining overhead costs is an effective way of generating more profit, but it can be difficult for dealers to cut the ‘necessary’ costs of building maintenance, equipment, cost of repair, advertising, etc. Traditional DOCs may have broken overhead expenses into line items, but in order to know exactly where the money went, dealers had to investigate. Now if an advertising line item shows $5,000 spent, dealers can simply double click on that number and the transactions will be listed in detail: $200 for balloons, $1,000 on newspaper ads, etc. This makes it easy to spot and eliminate unnecessary expenses.
Close monitoring of one of the biggest expenses in the dealership can save dealers significant amounts of money. On a daily basis, dealers can review payroll expenditure, overtime generated, and how much revenue each individual employee is producing. In particular, if a dealership has hourly technicians or is paying their salespeople base salaries, they can tell if an employee is consistently costing the dealership more revenue than they’re producing.
Department or Itemized DOCs
Modern DOCs can be broken down by department or by category, making it easy for dealers to review and retain information. Daily or weekly DOCs can be printed out for each department in just a few clicks, so dealers can be prepared for sales or service meetings. DOCs can also be given to each department manager, helping them with priorities while “hiding” certain confidential information such as itemized payroll expenses.
All of the above DOCs can be reviewed in a trend report, which gives a side by side comparison of revenues and costs on a daily, weekly, monthly or yearly basis. Comparing sales figures on a daily or weekly basis might generate new priorities in order to meet a monthly goal. Likewise, monthly trending reports can be reviewed to see if a yearly goal is attainable. Expenses can be broken down by category and compared to a year ago. Trend reports show dealers what’s succeeding and what’s not.
The Daily DOC is an incredibly powerful tool that allows dealers to keep close tabs on what’s happening in their dealership. Reviewing detailed revenues and costs allows dealers to quickly identify problem areas, maximize profit generators, keep track of trends and keep managers and employees in the loop. Decisions can be made based on facts and figures rather than speculation and hope. Today’s Daily DOCs are easily accessible and can be sliced and diced in many ways, giving dealers new insight and ideas on how best to cut costs and increase revenues.