14 Sep Cox Automotive Releases Dealertrack 2025 Compliance Guide

In addition, findings may include incorrectly accruing property taxes or other accruals, which can cause large spikes in income/expense from month to month. Move beyond the limits of spreadsheets with a system of record designed for complete compliance management. There is a requirement for the planning in the specific areas for performing the audit. The auditor will provide strategic planning to perform an audit and gather all the relevant documents and information. Some of the brands that you may find include Ram, Nissan, Jeep, GMC, Toyota and much more in our ever changing used inventory. If you’re interested in the assurance that comes with buying new combined with the affordable pricing of buying used, our certified pre-owned inventory is the right place to look.

Impact of Market Trends on Accounting

Resources gross vs net to help your dealership convert more leads into sales, retain more customers, and market inventory smarter, straight to your inbox every Sunday. Designating someone on your team who’s in charge of liaising between your dealership, your floorplan company, and the auditors can help streamline the inventory auditing. A single point of contact at your dealership can drive accountability and ownership of the audit to ensure nothing falls through the cracks. Having an audit captain ensures your dealership is an active partner in the inventory audit process.

Cox Automotive Releases Dealertrack 2025 Compliance Guide

Common methods include Last-In, First-Out (LIFO), First-In, First-Out (FIFO), and the Weighted Average Cost method. Optimize your auto dealership’s financial efficiency with expert accounting strategies tailored for the automotive industry. Dealerships face unique taxation challenges and must ensure compliance with accounting standards to avoid penalties and reputational damage. Inventory is a significant asset for dealerships and effective management is crucial for maximizing profitability and cash flow.

What is Dealer Floor Plan Financing?

• They can also check that there is a minimum number of certified sales consultants and technicians employed at the dealership.
• Dealer cash rebates reduce the cost of goods sold or may be passed on to customers as discounts.
• This metric helps dealerships assess the profitability of each unit sold, factoring in both new and used vehicles.
• If you own a car dealership, you know just how nerve wracking car dealership audits can be, especially if they’re unexpected.
• Service contracts, which provide extended maintenance and repair coverage, require revenue recognition over the contract’s life.
• This listing of all accounts used in the general ledger allows dealerships to categorize and track financial transactions.

Besides training your staff to make more sales, you need to make sure they know who they’re selling to. OFAC compliance has been a “must” for auto dealerships since the USA Patriot Act was signed into law on October 26, 2001. Since then, it has been virtual accountant required that auto dealers (and other businesses conducting financial transactions with consumers) screen any potential buyer before conducting a sale.

• The access controls to identify the weaknesses or deficiencies in internal controls to make improvements.
• Dealerships may also benefit from using accounting software like QuickBooks or Xero, which streamline the reporting process and ensure compliance with accounting standards.
• You will find that we not only offer a broad range of used cars from Chevrolet, but we also carry models from other popular brands.
• Auto dealerships face specific accounting challenges that require tailored strategies to ensure financial accuracy and compliance.
• LIFO matches recent higher costs with current revenues, potentially reducing taxable income during periods of rising inventory costs.

Auto Dealership Audit Requirements

Reconciliations, such as comparing bank statements or inventory counts to financial records, ensure accuracy and consistency across accounts. Dealerships should stay updated with accounting standards, such as the Financial Accounting Standards Board (FASB) guidelines. Complying with these standards ensures accurate financial reporting and enhances credibility with stakeholders. The Red Flags Rule (RFR) mandates that your staff must be proficiently trained in examining the actual identity of your customers. The RFR is of particular importance because there are so many ways to fall into non-compliance, even when you think you’re doing it right.

Regulatory Compliance

• The Automotive Dealerships Audit also evaluates the operations of services, repair, and the management of inventory.
• At LeadCar Chevrolet, we are proud to carry a vast selection of the latest Chevrolet cars, trucks, and SUVs.
• Leveraging our diverse skill sets we will create a comprehensive strategy for every facet of your finance and accounting needs.
• Internal controls encompass a range of policies and procedures designed to prevent fraud, detect errors, and promote operational efficiency.
• This rule mandates that used dealerships post a car buying guide before selling a used car.
• At GYL, our CPAs want to help you to be proactive vs reactive in preventing fraud before it starts.

If you own a car dealership, you know just how nerve wracking car dealership audits can be, especially if they’re unexpected. Whether it’s an unannounced visit from the IRS, a representative from your state’s Department of Transportation or from your bank, you want to ensure that the process goes as smoothly as possible. Dealerships should involve conducting due diligence on customers, implementing robust financial controls, and complying with anti-money laundering reporting and laws requirements. It will help them prevent money laundering activities and maintain their financial integrity.

There is a review of the sales and agreements contracts to ensure compliance with regulations. The dealership audit is also performed to evaluate the sales processes, including customer satisfaction and pricing strategies. The auditor conducts testing procedures to verify the accuracy of the dealership’s financial records and the internal controls to improve the identified irregular areas, minimize the risk and enhance the performance. A sales tax exemption certificate is needed in order to make tax-free purchases of items and services that are taxable. A purchaser must give the seller the properly completed certificate within 90 days of accounting for car dealerships the time the sale is made, but preferably at the time of the sale.