01 Jun Finding the Right DMS for Your Dealership —And Getting the Most from Your Investment
Though we work with business owners in a wide variety of industries here at The Accounting Guys, we provide specialized support and accounting services for power sports, marine, and RV dealerships. Our years of experience specializing in serving these businesses has provided us with insight into the unique accounting and bookkeeping needs of these companies—and if there’s one thing we’ve learned, the technology you use can make all the difference. Dealer management systems (DMS) like Lightspeed, Lizzy, and DX1 may seem like a large investment for your business, but when used appropriately, you will save an incredible amount of time, improve the accuracy of your books, and eliminate a great deal of frustration. Keep reading to get a few tips on how to get the most from your DMS, based on our expertise in working with dealers and their accounting systems.
Why Use a DMS Instead of QuickBooks Alone?
QuickBooks tends to be the go-to accounting system for new business owners; and while this software can provide a great starting point, along with many customization options to get it to fit your needs, it’s typically not the best solution for dealerships. QuickBooks is a very generic accounting software, designed to be used across many industries—and, as the saying goes, a jack of all trades is a master of none.
By comparison, DMSs are designed specifically for dealerships. That means you get the benefit that comes for thousands of dealerships providing feedback and asking for specific tools that speed up industry-specific reporting and workflow needs. Rather than wasting time building PDF forms or Excel templates as “patches” to help QuickBooks barely meet your needs, you can utilize templates and forms already developed through the input of other businesses like yours. Not only does this save an incredible amount of time, but it improves continuity; anyone can change a shared form or template, which can lead to inconsistencies and further time wasted correcting those issues.
QuickBooks also does not manage inventory, work in process inventory, or work in process labor very well—all of which are key components for dealerships. Relying on an accounting software that struggles with your primary accounting needs simply doesn’t make sense. A DMS handles these areas much more efficiently, so you can ensure you’re paying commissions accurately, understanding your actual income or loss, and make important decisions based on true, accurate information.
A DMS also provides a number of integrations that are simply not available in QuickBooks. Key among these integrations is the ease with which a DMS connects to Original Equipment Manufacturers (OEM). OEMs have worked with DMS developers to provide essential data and reporting requirements, which allows you to quickly grab images, prices, and other data from the cloud, rather than hunting down this information yourself. You eliminate redundancies and provide a single, streamlined sales process—and that means faster sales.
How Do You Choose the Right DMS?
If you haven’t yet invested in a DMS, you may be uncertain of where to begin when it comes to choosing one for your dealership. Many business owners are tempted to opt for the cheapest DMS they can find when first making this change; however, you’ll likely find a cheap DMS coming up short in many areas. While you may feel temporary satisfaction over finding a great deal on a DMS, the frustration that comes from using software that doesn’t meet your needs will last for years. Here are a few key things to look for to ensure you’re choosing the right DMS for your dealership:
- Look for ample integrations. The more integrations your DMS has, the better. Examine your current customer relationship management (CRM) tools, sales tools, spreadsheets, reporting tools, and so on, to find a powerhouse DMS that can automate as many of these tools into one system. If you plan to purchase a DMS and still use Excel spreadsheets, Word documents, and PDF forms as your primary frontend tools, then you haven’t found the right DMS for you.
- Look for built-in accounting that can run a balance sheet, income statement, and so on. Some DMSs have this while others do not. Without this capability built-in, you’ll need to input sales into your DMS, then transpose that information into another system. While a DMS can still be highly useful without built-in accounting reports, you need to carefully consider how often you’ll need to update that exterior reporting, who will perform these accounting tasks, how difficult transposing the information will be, and how much time it will take as compared to having it all in one system. Typically, the time savings and increased accuracy of built-in accounting is worth the added cost.
- Make sure the DMS allows you to build your own reports. When utilized correctly, this functionality can be a game changer. Custom reporting allows you to quickly and accurately get the reports you need from your software so that you can make important financial decisions more swiftly and efficiently. We rarely finish a consulting call with a client without having run and/or built a custom report for the client to make completing the task easier.
- Use a cloud-based DMS for access from anywhere. Many dealerships today need to be able to make sales and pull information in a variety of locations and from many different devices. Being able to access your DMS and the information it contains from a phone, tablet, or remote computer is crucial. A cloud-based DMS also protects you from vital data loss, which can occur if all of your reports and valuable information are housed on a single in-house computer.
Getting More from Your DMS
Hopefully by now you’re ready to make the switch from solely using QuickBooks to using a more efficient DMS, and feel informed enough to make a decision about the type of DMS you want to use in your dealership. But once you’ve purchased a DMS for your business, how do you get the most out of it? Here are a few important tips to follow that will help you get the most out of your investment:
- Utilize the company’s training. Most DMS companies provide training as a part of their sign-on package. Make sure to utilize this, and schedule it appropriately so that any staff members who will be using the DMS can attend. Take ample notes, ask for supporting materials, and don’t hesitate to ask questions if there are any functionalities or features you don’t understand. We’ve seen dealers struggle for years to make full use of their DMS, and it always comes down to better understanding the basics of their software. When we provide this training and information, our clients are inevitably amazed at how much time they could have been saving, rather than spending years using time-consuming workarounds. A little extra attention and a little more invested time from the start can help you to make the most of your DMS right away.
- Commit to using your DMS, and throw out your old processes. We see many dealers invest a great deal of money into these systems, only to continue using their old software and templates. This is often due to a lack of confidence in their ability to utilize the new software (which, again, may be rectified by proper training early on). Rather than leaning on your old processes and using them as a crutch to avoid committing to your new DMS, set a clear deadline for when you’ll be completely moved over to the new software—then stick to it!
- Have employees make notes of specific examples throughout the week of things they find difficult or don’t understand within the DMS. Then, when a trainer is on site, they’ll be able to get answers and explanations for the things that they struggled with, rather than trying to remember the issues that they had earlier in the week.
- Ensure staff members understand how their tasks and their job role is reflected in the DMS. They should clearly grasp daily, weekly, and monthly processes and expectations, as well as how to use the software to help them with those tasks. Anything they do as part of their daily job should also be reflected in your DMS. This keeps your reporting an accurate, historical reflection of reality, making it more capable of forecasting your future finances.
Ultimately, getting the most out of any DMS comes down to having the knowledge you need to use it confidently and completely. Your DMS is a major investment, and it’s essential that you’re able to get the most from that investment. At The Accounting Guys, we have years of experience in working with a variety of dealer management systems and providing accurate monthly accounting and bookkeeping for over 200 dealerships across the country. Contact us today to get the support you need with fully implementing, utilizing, and optimizing your DMS to meet your business’s needs.