DMS and Invoicing

You may not be able to decipher a doctor’s prescription, but the bill is always computerized. Why?  They want to get paid.  Your DMS invoicing system has the same objective; it enables your customer to have the information they need to pay you and ensures that your employees get the information they need to help the customer.  Let’s use the service department as an example.  When I create a service invoice – or repair order, I need to find the vehicle that we’ll be working on in the database, view the previous history, get the current mileage, enter the customer complaints, get an approval of an estimate amount, and note the best way to contact the customer later.

Compare this to a parts invoice.  The parts counterperson doesn’t need any of this information; often the wholesale customer is buying parts for many different vehicles in their shop.  Instead you parts department employees need the customer’s credit balance, shipping address, and if a purchase order is required.  The taxing is different too.  A repair order is normally taxed at the dealership’s rate since the work is done in the shop.  A parts ticket can be exempt, taxed at the dealership’s rate, the customer’s shipping address or if there is an outside sales rep, the customer’s business address. It can also depend on the type of work done or the type of part sold.

The sales department has the most complicated invoicing system.  Each vehicle must be sold on separate invoices for the accounting department to clear the schedules by stock#, cust# or some other control number.  If the term “schedules” seems confusing, read my previous articles about the need for schedules in a DMS.  Can you imagine creating a separate invoice for every part on a parts ticket? Parts inventory is not scheduled like vehicle inventory. If there are multiple vehicles being sold, the invoices (or deals) must be able to be linked to each other to print a single invoice for large purchase order from a fleet customer like a rental car company or school district.  The sales department needs different types of invoices; buyer’s orders, sales contracts, financing contracts, internal recap sheets, etc.    In the shop, there aredifferent versions of each repair order; a Customer, Warranty and Internal copy and also a copy for the Shop with past history.  Both the Parts and Service departments have an Accounting copy with the cost amounts.  You might think, “this is just form programming” and that three different types of invoicing systems isn’t really necessary, but each invoicing system functions differently, especially when it comes to the interface with accounting.  When an invoice is closed in Parts, Service and Sales, an accounting record is created to enable “auto-posting” of the sales transactions. If your DMS system had only one invoicing system like most standard ERP or accounting packages, then transactions would be posted manually to get them in the right GL accounts.   For the parts department, this interface between accounting and parts invoicing is normally determined by the type of part being sold combined with the sales type.  The type of part is segmented by Source.  For example, you might sell oil that is in a certain Source to a Retail customer and that goes to a different sales account than a mechanical part that was sold to a Wholesale customer.  In the service department the interface is determined by the Labor type.  The labor type might be for a certain factory and customer type like KIA Warranty as compared to Chevrolet Retail and that determines not only the rate for the labor, but the account numbers for the labor sales and parts sales – but the parts GL accounts are determined by the Source of the parts.  In the sales department, the accounting interface is setup by the vehicle model, sales type, and then by the various items being sold.  A dealership puts the fees, aftermarket, insurance, warranty and taxes in all different accounts based on the description of the item and the type of item being sold.  Setting up these interfaces can take days of customized mapping and a DMS system requires three mapping systems to make it work.  When the interface is setup correctly, the accounting staff merely validates most transactions. If your DMS does not enable the amount of customization that you require, then your staff painfully enters each transaction line manually.  A typical car deal has 25-30 accounting entry lines.  This is where many bargain DMS systems fail – they don’t have the interfacing features you had in a Tier 1 system like ADP (CDK,) R+R or DealerStar and the office is manually posting deals and that means more mistakes, slower closing of the books, and overtime for the office staff.  If your DMS lacks the invoicing features you need in Parts and Service; this can lead to past due AR accounts and rejected warranty claims.  Sometimes a Tier 1 DMS system pays for itself with higher productivity and less write-offs.


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