Auto Dealership Accounting


We have solutions to help your dealership run smoother.

The advisors at Cornwell Jackson understand that auto dealerships face unique challenges each day. One of the most common issues our advisors help dealers to resolve is how to increase cash flow. Many businesses in the auto industry struggle to balance the high cost of maintaining appropriate levels inventory with low influxes of capital.

Cornwell Jackson’s Auto Dealership Accounting Solutions:

  • Auto Dealership Accounting Specific solutions
  • Related Finance Companies (RFC)
  • Tax Planning and Preparation for entities and owners
  • Audits, Reviews, and Compilations
  • Business Advising
  • LIFO Inventory Calculations
  • Cost Segregation Studies
  • Develop Estate and Succession Plans
  • Internal Compliance self-audits on key dealership audit area (sales tax reporting, demonstrator vehicles, warranty contracts, etc.)
  • IRS Representation

Types of Dealers We Work With:

  • New and Used Car Dealers 
  • Buy Here, Pay Here  
  • Motorcycle Dealers 
  • RV and Travel Trailer Sales

 

Knowledge Base – Auto Dealership Articles

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Using Debt to Increase Cash Flow

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 Recent Auto Dealership Blog Posts:

Changing the Mindset for Buy Here Pay Here Dealerships’ Customer Service

There are two schools of thought when creating cash flow for a buy here pay here auto dealership. One involves selling cars as quickly as possible and repossessing them just as quickly. The other more viable option is to focus on customer service. By keeping customers in a vehicle longer, the dealer can also … Continue reading Changing the Mindset for Buy Here Pay Here Dealerships’ Customer Service

Auto Dealers Can Fill Gaps Between Inventory and Collections with Smart Debt Management

In the life cycle of any auto dealership, there will be times when cash flow is tight. Buy here pay here dealers in particular face complexity to ensure enough inventory is on hand to attract buyers — and offset that investment with a healthy flow through collections and debt management. This balance is never perfect. … Continue reading Auto Dealers Can Fill Gaps Between Inventory and Collections with Smart Debt Management

Increasing Cash Flow with Lines of Credit

The average used auto dealership operates differently today than it did prior to 2008. Although margins can be healthier for “buy here pay here” dealers than for market rate dealers, accounting for these dealerships is complex. And cash flow is a constant concern. Dealers must balance inventory investment with collections. Yet, receivables alone don’t support …Continue reading Increasing Cash Flow with Lines of Credit

Related Finance Company Pros and Cons

A Related finance company can provide a useful service to the public when operated to help auto dealerships sell cars to people who need an alternative financing method. This does not mean that every dealer should operate an RFC. Rather than a benefit to the dealer, it can actually be a financial drain due to unnecessary … Continue reading Auto Dealership Accounting: Related Finance Company Pros and Cons

Auto Dealership Accounting: Does Your RFC Pass the IRS Validity Test?

Related finance companies (RFCs) were not designed to be a tax-planning vehicle to reduce or defer auto dealership income. If the IRS validity test discovers noncompliance that cannot be explained in the RFC’s or dealership’s documentation, additional taxes and penalties can be severe. We find that many RFCs and dealers do not regularly review their … Continue reading Auto Dealership Accounting: Does Your RFC Pass the IRS Validity Test?

Contact our Dealership Specialist

Call us to arrange an appointment at 972-202-8000 or email us using the link below.

Mike Rizkal, Audit Partner

View our Auto Dealership Blog

Dealership Hotline

Do you have a question for an accountant regarding how to run your business better? Interested in improving profitability? Are you trying to streamline operations? Looking for a way to have more cash now? Just Ask! We are here to help you grow your business.