Automotive Stores Accounting
Automotive Stores Accounting: Critical Success Factors for Enhancing Business Profitability in 2017 and Beyond!
With the pre-tax profit percentage for auto Parts & accessories stores declining in the US in 2016, as depicted in the graph above, the main focus of the automotive parts and accessory stores in the US will be to focus on enhancing financial visibility and leveraging technology to analyze future trends across store locations to aid in critical business decision making.
We have identified key differentiators that will ensure that automotive store owners can maximize their returns and enhance business profitability.
- - Cost Optimization: The dynamics of the automotive parts and accessories stores industry are
changing. The existing assumptions in the business are losing relevance and the focus is shifting
on cost optimization to sustain profit margins. The graph below highlights the mounting
operational cost that has emerged as a real threat that poses the potential to impact business
profitability for the small auto store owners. The mantra to success going forward will be on
how well businesses can optimize costs and not necessarily cut costs.
To achieve this, automotive store owners need to partner with trusted service providers with deep-domain expertise who can provide them with meaningful financial analysis and business insights to optimize profitability and enhance operational efficiencies.
- - Embracing Technology: The automotive industry will lean heavily on technological innovation
to harvest the emerging opportunities. Concurrently, the technological advancement for the
auto store owners is moving beyond just warehouse and logistics. The entire operations of an
automotive parts and accessory store may be disrupted with new technologies spreading in the
areas of finance and accounting, payroll and other back office services. Auto store owners are
now eager to adopt the best in breed robust technological platforms that enhances financial
visibility enabling them to become proactively insightful. Additionally, they desire access to the
next-gen technological platforms that offers best-in-class dashboards, alerts and reporting
templates across various product classes and dimensions, enabling them to gain access to the end-to-end financial analysis covering all aspects of finance, including Profit & Loss, Balance Sheet, Cash Flow, and Inventory. This will lead to a new ecosystem of automotive parts and accessory stores partnering with trusted service providers offering finance and accounting services using next-gen technological platforms at fractional price points and create new business models.
Auto store owners that fail to embrace the opportunities that the upcoming technologies are creating will become increasingly marginalized and irrelevant.
- - Leveraging Data for Business Intelligence: For decades, automotive stores have been making business decisions based on transactional data. However, as the industry adopts a higher level of technology, the growth in real time data will create the need for analytics that will help auto store owners make faster and smarter decisions. Going forward, auto store owners will require access to business intelligence tools that offers state-of the-art analysis, reporting and report designing capabilities, enabling them to measure and track overall key performance indicators (KPI's) which can increase operational efficiency and profits of their stores. As a result, auto store owners are looking forward to partnering with service providers who can offer exclusive business intelligence tools that measure the financial health of the business and give an indication of how current business performance may affect both the short term earnings as well as the long-term revenue generation capability of their business.
- Enhance cash flow management
- Ensure compliance with ever-changing accounting regulations
- Leverage best practices and continuous process improvements
- Monitor expenses and identify cost-saving opportunities
- Improve ability to obtain preferred terms and lines of credit