4 Min ReadMarch 26, 2024

What’s Causing Heavy Truck Dealerships’ Accounting Hardships and How You Can Fix Them

Closeup of people at a desk

By now, you’ve probably heard that heavy truck dealerships have an accounting problem. The truth, however, is that they actually have several.

Finding qualified hires capable of navigating today’s accounting software and reporting requirements is harder than ever. The complexities of managing costs, accounts payable (AP), accounts receivable (AR) and P&Ls continue to grow. Meanwhile, widespread dealership consolidation and increased original equipment manufacturer (OEM) scrutiny have made accurate reporting even more crucial.

But what’s driving these changes and creating so many headaches for dealerships? And how can today’s heavy truck dealerships shore up their accounting practices, balance their books, protect their data, and align with customer and vendor expectations?

Let’s look at the causes of the industry's accounting problems, what dealerships can do about it, and the technologies and tactics they can leverage to get ahead of the curve.

The Source of Truth and Frustration

For today’s dealerships, accounting may be considered something that happens after: after a sale, after ordering inventory, or after it’s time to run the end-of-year closing report. But accounting as an afterthought isn’t a viable long-term strategy for dealerships eager to compete in today’s market, according to Dan Doolin, lead product marketer at CDK.

“Many of today’s dealerships are family businesses that thrive on relationships and a history in and with the communities and businesses they serve,” Doolin said. “That’s unlikely to change any time soon — and it shouldn’t. After all, this approach is how these dealerships became successful in the first place. But as a result of this approach, accounting is often seen as something that comes after those relationships, which is increasingly unsustainable for many dealerships.”

That’s because accounting, Doolin noted, is the final source of truth for banks, vendors and even the U.S. government.

“Uncle Sam requires you to keep accurate accounting records, as do OEMs,” he said. “These manufacturers have very detailed ownership agreements that require dealerships to provide them with detailed data in a very specific format. Failure to do so can, in some cases, cost these dealerships their franchises.”

Some dealerships may opt to try to solve this by hiring accounting professionals with direct dealership experience, but even that’s becoming increasingly challenging and, in some cases, downright impossible. Why? Consider:

If each of those accounting firms created just one entry-level job per year, that could take every accounting grad off the market, leaving none for firms in other industries.

With three-quarters of existing CPAs at or beyond retirement age, it’s hardly likely that those firms will create only one job per year. In fact, with the crush of Baby Boomers retiring or planning to do so, the need for accounting talent in the U.S. is likely already being felt across industries and companies of all sizes, which may leave dealerships scrambling to fill crucial roles in the financial function, with little or no success.

Why Experienced Hires May Not Be the Solution to Dealership Accounting Challenges

With so much riding on dealerships’ abilities to deliver accurate accounting and so few qualified accounting professionals to go around, how can heavy truck dealerships hope to meet their accounting and AP/AR needs?

The answer may lie in technology, rather than people.

“There was a time when dealerships whose books were a mess would default to hiring an experienced accountant to manage them,” said Greg Bragg, accounting principal product manager at CDK. “Today, however, it’s likely that many dealerships simply won’t be able to find and hire experienced accounting professionals — especially if they’re looking for candidates with experience on the dealership side of things.”

“But,” he added, “with the right solutions in place, they shouldn’t have to.”

That’s because today’s leading dealership solutions can help take the guesswork out of things like AP/AR aging reports, reconciliations, P&Ls and more — even if the person responsible for them doesn’t have an accounting background.

Enter CDK’s suite of solutions designed specifically for heavy truck dealerships and their ongoing needs.

Solutions That Are Scalable, Flexible and Trusted by the Industry

With too few qualified hires on the market and growing demand for accurate accounting and data reporting, Doolin and Bragg offered a range of solutions. These fully interoperable solutions can ensure not only accounting accuracy and timeliness, but ease of use, a lower barrier to entry in terms of required skills and experience, and the ability to grow and scale with changing demands in the marketplace.

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CDK Global Heavy Truck
By CDK Global Heavy Truck
Staff

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