VEHICLE PAYOFFS

There are times in every dealership when the store has the cash shorts and managing cash becomes a juggling act. The financial institution expects the dealership to payoff sold units within a day a two of delivery. When the store has the cash shorts always payoff one or two units daily. To payoff three vehicles on Monday and then not payoff any vehicles until Friday sends a red flag and could trigger an audit. Be consistent. If the sales department delivers five vehicles today and the dealership has the cash shorts, try to payoff one or two of the units today and one or two units tomorrow, etc.

Your financial institution knows there are times when the dealership will have the cash shorts, especially during the latter part of a quarter when the store is looking for the holdback check. Somehow the controller must be a magician and find a way to keep a payoff flow to the financial institution. It keeps the wolves away.

A Horror Story

The office manager sent a floor plan payoff check to the factory captive financial institution without bothering to look at the bank balance. The bank account had a balance of $197,000. The amount of the payoff check was $300,000. The bank bounced the check and the financial institution immediately sent a swat team to audit the stores books. And for the next 90 days the dealership was subject to a weekly floor plan audit. And that ain’t fun.

ALWAYS SEND SOMETHING DAILY

AND

ALWAYS CHECK THE BANK ACCOUNT BALANCE