Download - Are Employees Pickpocketing Your Profit?
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Are Employees
Your Profit?
By Harlene Doane
Pickpocketing
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A person who takes money or other valuables from someone without the theft being noticed at the time.
Pick
pock
et:
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Some employees are the
of a pickpocket. equivalentThey take advantage of your poor policies and procedures.
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See if any of these
things happen in your store
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One.OR
Employees are able to make purchases without purchase orders.
You require purchase orders, but allow the same individual to match delivery, do
invoices, and authorize payments.
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The amount of money they take
is often if your store operates on a COD basis instead of
utilizing vendor credit.
higher
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The items are often ordered and paid for in
for you to notice or question the purchase.
too short of a window
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Limit
the number of individuals
who can issue purchase
orders & make payments.
Make sure a
person is matching packing
slips & invoices to purchase orders for
payments.
Different
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Numerous employees are able to sign checks or make
electronic bank transactions.
Two.
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If signers of checks aren’t vested in the company, they won’t watch the
dollars leaving like you do.
As the number of signers, or those with access to
your banking, increases so does the opportunity for misappropriation of your
money.
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Since no one watches your money quite like you do…
• Review your bank statement every month.
• Question unusual transactions.
• Limit the # of people authorized to spend your money.
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Part pricing gets overridden and discounted.
Three.
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Discounting parts is like a slow tire leak…
At first, you don’t notice, but eventually your tire (Gross Profit) goes flat.
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Review your part’s gross profit regularly.
Look at staff overrides to ensure your staff aren’t abusing the discounts.
and
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Service tickets are closed to coupons, discounts,
or other internal accounts.
Four.
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A coupon runs and never gets removed from the system.
Then it becomes too easy to continue giving it to those
who shouldn’t have it.
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Review your…
• Trial balance • Service department reports• Parts department reports
See if dollars were being written off that were never authorized.
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Employees get discounts that you did not approve.
Five.
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You now have employees picking your pocket at the
same time.
If so…
The one who received the service and the one who gave it away.
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Set a policy in place for all employee transactions.
Cover:1.) Parts2.) Services3.) Vehicle Purchases
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Parts are returned for cash.
Six.
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Say your shop orders a non-inventoried part (Emergency Part) and it turns out to be the wrong one…
A runner goes to get the right part.
The right part is ordered. (Maybe from a different supplier)
What happens to the part?wrong
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Since it’s not stocked in inventory, it’s pretty easy for
the part to the dealership, be , and the just may not make
it back to you…
Leave Returned
Refund
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Parts:Employe
es:
Vendors:
Should be stored in a secure location with very limited access.
Should know they are not allowed to accept cash for any parts returns.
Should know that all part returns must be handled by providing credit
on your account or by writing a check to your dealership.
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Seven.Sales department policy authorizations are out of
control.
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A crazy amount of dollars are charged to policy because
OR
The sales team is afraid to ask the customer to pay for something after the sale.
The sales department fails to set up a We-Owe at the time of sale.
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Make sure sales management is accountable for those charges through their compensation plan.
Complete We-Owe’s on every deal, even those where nothing is owed, and have the customer sign it.
Set firm limits on policy authorization in both dollars and who can authorize them.
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Why let your policies & procedures get so lax that your employees get to?
You wouldn’t like a pickpocket rummaging through your pockets…