Car dealership CFO services: the money is in the turn, not the sticker

Four departments, one bank account

A dealership is really four businesses — new vehicles, used vehicles, F&I, and fixed operations — and each one is measured differently, which is why a store can show healthy gross on the DMS while the bank account tightens every month. The usual culprits are floorplan interest and aged inventory, and neither shows up in a per-deal gross report. Our fractional CFO work for franchised points and independent lots builds a monthly package that reconciles PBS or CDK output to the books, then reads the store the way a buyer or a banker would: turn, floorplan cost, F&I per unit, and service absorption.

Floorplan: rent on every unit, every day

Floorplan is floating-rate rent on your inventory, so every unit has a holding cost per day — and the discipline starts when that number is printed beside every vehicle on the aging report. From there the rules get mechanical: curtailment payments on aging units come out of cash whether or not the unit sells, payoffs are due promptly once a unit retails, and letting proceeds sit in the operating account past the payoff date is how stores drift toward being sold out of trust. We reconcile the floorplan statement to the DMS and the bank monthly, so the lender's audit never finds something you did not already know.

The same lens prices every appraisal: a trade you own too deep is not a deal, it is prepaid interest. Clean floorplan data also feeds the conversation when you ask the lender for a bigger line — capacity follows credibility.

Turn targets and the aging ladder

Inventory age is the best single predictor of used-vehicle profit, because a unit's holding cost rises every day while its market value falls. We set day-supply targets by segment from your own sales history, then run an aging ladder where every bucket has a forced action — the goal is that losses are taken deliberately and early, never slowly:

F&I penetration and fixed-ops absorption

F&I gross per retailed unit is the number that separates thin stores from strong ones, and it is built from penetration rates — the share of deals carrying financing, warranty, protection, and insurance products. We track penetration by product and by salesperson, and we make sure chargeback reserves for cancelled products are real liabilities on the books, not a surprise in a soft quarter. On the other side of the shop, service absorption — how much of the store's overhead is covered by parts and service gross — is what lets a dealership survive a slow sales quarter without panic. Raising absorption is slower work than a good sales month, but it is the sturdier asset, and it is the first thing a sophisticated buyer of your store will ask about.

Used-car sourcing economics

Where a used car comes from sets its margin before it is ever priced: trades appraised in-house are usually the cheapest metal, service-drive and street purchases come next, and auction cars carry fees, transport, and recon on top of the hammer price. We track landed cost and eventual gross by source channel so the buying budget follows evidence rather than habit. US auctions widen the funnel but add FX, transport, Registrar of Imported Vehicles processing, duty where the vehicle does not qualify for preferential treatment, and GST collected at the border — a spread that must be modelled per unit before bidding, not discovered at landing. The import mechanics, USD floorplan exposure, and the tax filings that follow live on our cross-border tax page for dealerships; the daily DMS-to-books pipeline that feeds all of this is built by our dealership bookkeeping service.

Source: Registrar of Imported Vehicles — importing a vehicle into Canada.