The Issue
The client, a national distributor of an Asian manufacturer, wanted to improve the accuracy and usefulness of its dealerships’ financial reporting. Initially, the client was driven by requests from individual dealers to compare their financial results to other dealership in the network. But upon exploring the issue, the client uncovered some fundamental reporting problems requiring attention.
In the first instance, many dealerships were using a manual process to build composites from their operating reports. As a result, reports were often not available until well into the following month after close of business. The client also discovered wide variations in the quality of the data reported due to some dealerships’ incorrect accounting procedures and policies.
Our Approach
PricewaterhouseCoopers was engaged to design a system that would enable operating data to be pushed from the dealership management system to a new proprietary platform called, eComposite™. In order to address quality issues, the system compares data received from dealerships to OEM accounting rules and requirements. During this process, dealer management is advised of potential problems and have an opportunity to resubmit data. In order to improve the quality of data submitted in the first place, PricewaterhouseCoopers also designed and delivered training for the field organization and dealership management personnel on proper business management procedures according to the OEM accounting manual, With this system now in place, online reporting is available on a real time basis.
The Outcome
This approach improved data quality and helped promote the use of eComposite™ reports in daily operations. The rate of errors detected in initial financial statement submissions were reduced from 50 percent to less than 5 percent within 3 months of the system’s deployment.
