e-Automate Audits – Should you have one?

Have you ever wondered if your ERP system is set up and used correctly? Do you feel your people are following best practices and using it as it was designed to be used? You may be surprised at what you find!

In 2019 BEI Services. Inc. (now Nexera) acquired a company (Business Systems Consulting) that provided many services to dealerships including ERP system audits… As the VP of Sales for then BEI Services, I acquired substantially more offerings to sell as part of the Nexera portfolio. I also had a lot to learn because many offerings were outside of the service area where I spent the majority of my 28-year career. Richard (Dick) Elixman who was the previous owner of BSC helped many dealerships in a variety of key areas, and ERP System Audits were one of the most beneficial because they always exposed the weak areas in dealerships processes so those issues could be rectified.

The ERP audits performed now by the Nexera team are in-depth and inclusive of all areas of the ERP including Financials, Contracts, AR/AP, Service and Inventory. When I discuss this service, I explain to customers that it is like an MRI of their business operations. It will clearly demonstrate if best practices are being followed and where any weaknesses are in the organization. When we complete the review of audits with clients, many times they are not aware of the challenges revealed, and in some cases, they are not surprised because they knew they had issues but were unsure how to correct them.

One item that I have noticed from the many audits we’ve performed is that typically smaller dealerships have many of the issues explained below due to lack of manpower, proper training or procedure follow through. These types of issues can cost companies thousands, if not tens of thousands of dollars every year! In most cases the majority of these issues can be easily corrected in a timely manner through direct updates to the database via our programmers.

Here are number of common issues we see often in optimization audits:

Financials

• Chart of accounts not set up and/used correctly causing poor bookkeeping, balance sheets and tax preparation
• High receivables past 60/90 days
  • No best practices in place for email and/or courtesy call follow ups
  • Not enough manpower to make follow up courtesy calls
• High unapplied cash
  • Customer payments not applied to invoices
    • Could be contributing to high late receivables

Contracts

• Contracts expired and the dealer is not getting paid yet still providing services.
  • Workflow reporting is not in place to report these sales opportunities
• Contracts not set to automatically escalate leaving money on the table.
• Contracts not reconciling to leasing company payments
  • Rounding differences (Standard rounding opposed to Bank rounding [e-Automate]
• Contracts have no expiration date, and continue to invoice leasing company when lease has expired
• Billing not properly set up and queue reviewed
• Inactive equipment shown active
• Inactive customer shown active

Item Evaluation

• Item categories, Inventory Codes, Sales codes, Equipment Codes and Service codes not cleanly managed and in many cases too confusing and too many
• Not properly aligned with GL codes

 Inventory

• Very high dollar amounts if aged and obsolete inventory
• High overstock amounts of inventory need (High dollar amounts above 3 months need)
• High monthly dollar amounts aged inventory crossing to obsolete inventory

To see an example of what a completed evaluation looks like, click the button below for immediate access.

Access Sample Evaluation

If you feel you may have some challenges with your ERP, and are in need of a system audit or some other systems clean-ups, please contact Nexera to help with your needs.