are employees pickpocketing your profit?

Are Employees

Your Profit?

By Harlene Doane

Pickpocketing

A person who takes money or other valuables from someone without the theft being noticed at the time.

Pick

pock

et:

Some employees are the

of a pickpocket. equivalentThey take advantage of your poor policies and procedures.

See if any of these

things happen in your store

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.

The amount of money they take

is often if your store operates on a COD basis instead of

utilizing vendor credit.

higher

The items are often ordered and paid for in

for you to notice or question the purchase.

too short of a window

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

Numerous employees are able to sign checks or make

electronic bank transactions.

Two.

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.

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.

Part pricing gets overridden and discounted.

Three.

Discounting parts is like a slow tire leak…

At first, you don’t notice, but eventually your tire (Gross Profit) goes flat.

Review your part’s gross profit regularly.

Look at staff overrides to ensure your staff aren’t abusing the discounts.

and

Service tickets are closed to coupons, discounts,

or other internal accounts.

Four.

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.

Review your…

• Trial balance • Service department reports• Parts department reports

See if dollars were being written off that were never authorized.

Employees get discounts that you did not approve.

Five.

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.

Set a policy in place for all employee transactions.

Cover:1.) Parts2.) Services3.) Vehicle Purchases

Parts are returned for cash.

Six.

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

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

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.

Seven.Sales department policy authorizations are out of

control.

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.

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.

Why let your policies & procedures get so lax that your employees get to?

You wouldn’t like a pickpocket rummaging through your pockets…