Inventory variance is a persistent challenge for dealership parts departments, often leading to financial losses and operational inefficiencies. While minor discrepancies may seem insignificant, they can accumulate over time, affecting profitability, customer service, and even compliance. Understanding the hidden costs of inventory variance is crucial for dealership managers and accounting teams. 1. Financial Losses Due to Shrinkage One of the…
To reconcile your parts inventory to your parts general ledger you’ll need to take your ending inventory balance and compare that to your GL closing balance for the same date. You will also need to account for all your reconciling items. Using the following calculation will give you your variance: Variance = Ending Inventory – (GL Closing Balance + Reconciling…
PartsCount by Total Dealer Solutions (TDS) was established in 2003 to meet the automotive dealers’ need for an unbiased, professional third party parts physical inventory. We specialize in the automotive industry exclusively because with specialization comes expertise. Here are some tips and best practices to follow to maintain a clean parts inventory.
Parts that are 12 months and older are obsolete. Parts that have not sold for 6 months have a 65% chance of not selling again Parts that have not sold for 7-9 months have a 75% chance of never selling Parts that do not sell for 9-12 months have an 85% chance of never selling Obsolescence exists in every dealership…
A parts physical inventory is a process where an automotive dealership physically counts its entire parts inventory. It is recommended that a parts physical inventory be conducted every year. Why should I do a parts physical inventory? Physical accounting of the dealership’s parts assets is critical in managing a dealership’s capital investment. A physical inventory is also essential to keep…