Issue Date: Parts Manager Aug 2008, Posted On: 8/3/2008
Behind the numbers Some tips for using ADP's accounting functions to increase parts profits One of the most illuminating exercises a dealership manager can do is to review the journal entries behind the numbers on the store's financial statements. The parts department might be charged $10,000 for "outside services." But knowing exactly which services you are being charged for will give you an extra level of control.
The easiest way to keep a close eye on your expense accounts as well your revenue accounts is to pay close attention to your Daily Operating Control (DOC) Sheet. However if want more in-depth knowledge of what's going on in each account, and thus take corrective action, you will have to get access to the accounting functions in your DMS.
The DOC sheet should show the month-to-date totals for all your sales and expense accounts, as well as gross and net profits, but it gives you no supporting detail as to what went into those accounts.
In an informal survey of parts managers, DealersEdge asked how many of the managers, using ADP, had access to the accounting functions in their dealership computer systems. Most responded that they had access but didn't know how to use the functions.
This is important. If you do not have access to the accounting functions ask your dealer to authorize access. Dealer/owners are quick to hold departmental managers accountable for results, but they are reluctant to give the managers all the tools they need to do the job.
Dealers may be skeptical about giving you access because they feel you could manipulate the system and/or look at information that they feel should be confidential (like payroll for example). First let your dealer know the reason why you want access. Explain to your dealer that you want to look at sales and expense accounts in order to increase the profitability of your department. Further explain to your dealer that you want display functions only so that you can't manipulate the system and you do not want access to payroll, only general ledger (GL) accounts.
Accessing GL Online inquiries The only function code you need in order to display GL accounts is AGRI, since AGRI will give you all the detail you need, this article will focus on how to use AGRI.
The ADP account you normally use is AC, for accounting. The path from account AC is
AG ---to--- AGR ---to--- AGRI, or you can go directly to AGRI.
AG = Accounting General Ledger AGR = Reports AGRI = Online Inquiries
Using AGRI Lets take an in depth look at how to utilize AGRI to get more detailed information from the GL for sales, expense and inventory accounts. Once you access AGRI it gives you a few options at the header of the screen, balance inquiries or detail inquiries. A good place to start is by going to balance inquiries first because you can still access the GL detail from the balance inquiries. With balance inquiries highlighted hit enter, hit enter again on account bal. The screen should now show as follows:
Company: ABC Ford
Current Month/Year: 08/08
Daily Balance Date: 08/11/08
Include Future Postings: No
Include Stat Count: No
The system automatically defaults to the current month and current date. From this point you can only access the current month's balances (notice the cursor defaults at the daily balance date.)
Hit the return until you get to Account(s). If you know the GL account numbers you want displayed, type them in here with a space between each account number. If you don't know the account numbers you can hit F12 for a list. Once the GL accounts are typed in simply hit F3 and then hit return on Proceed to display. The next screen will show the balance forward as well as closing balance, the day's balance (what was posted today) and the current month's total.
F6 for details In order to get more detail about the account, simply hit F6 (note you can change the date to a previous month at this point) then F3 and then enter on Proceed to display. The detail screen now shows all the individual postings made to that GL account. The detail is first separated by journal numbers (i.e. purchase journal, sales journal etc.) and then by reference number. The reference numbers is the actual document number (i.e. invoice number, RO number.) The control number is an account number for a vendor or customer (i.e. payables, receivables.)
If you want to know all the accounts that were posted to the document simply hit the F8 key then F3 and then enter on Proceed to display. Likewise, if you want to know what was posted to a customer or vendor's account you can use the same procedure using the F7 key.
There may be times when simply looking at the detail for a particular GL account doesn't give you all the data you need. In that case you may want to pull or view the entire document.
Here's an example from my store:. As I was reviewing some GL accounts I noticed my policy adjustment account (Ford GL# 7650) was much higher than it should have been. Using AGRI, I noticed a posting of $800 to a reference number and a specific repair order. I pulled the RO and found that our dealer gave the customer $1,600 off his repair, $800 charge to service, $800 to parts, even though the repairs were due to customer negligence and no fault of parts or service. There were a few other things wrong with the way it was done. First, if I give a discount I don't like to charge it against an expense account because of the way commissions are paid. Secondly, the service department made three times more profit from the repair than the parts department. I pointed this out to my dealer and he agreed that it wasn't done properly. We then reduced the sales amount, credited back the expense account and adjusted it to $400 parts and $1,200 service.
For ADP stores, using AGRI can save your department, as well as your paycheck, a lot of money. Keep in mind when looking at the GL detail that debits increase expenses and inventory, where as credits increase sales accounts. If you have trouble with AGRI, give me a call and I'd be happy to walk you through it.