Are your books accurate?
In a dealership, all of the departments are working together to keep the dealership running smoothly. What really keeps the ship sailing is the importance of the accounting department. The success lies here and the numbers will be revealed of the financial statements and their accuracy.
One of the best ways to monitor the cash flow of any type of business is reconciliation. There are a lot of vital moving parts in the dealership, so it is key to assure the accounting department is maintaining the books.
Reconciling accounts helps avoid fraud and errors. Here are some examples of what gets discovered through the reconciling process:
- Debits and credits could have been reversed when posted. Numbers could have been entered incorrectly, causing imbalances and inaccurate numbers.
- Calculation errors.
- Potential fraud
One key component in this is having a third party or more than one individual oversee the books. If you understand your financial statements as an owner, you will have the upper hand. In many cases, when their isn’t enough control or overseeing to the books we see a lot of fraud from inside the office itself. It is beneficial to the owners to understand and read the statements, or hire a third party accountant to evaluate the books.
References:
Car dealership accounting: How Reconciliation helps you find Errors, fraud, and better ways to do business. (2017, September 15). Retrieved April 01, 2021, from https://www.autoraptor.com/car-dealership-accounting-reconciliation-helps-find-errors-fraud-better-ways-business/