Utilizing Excel to Prepare Budgets & Forecasts
- Enable attendee to become pro-active in preparing budgets
- Allow attendee to compare budget to actual analysis in a dealer financial format
- Benchmark historical results to assist in determining strengths and weaknesses of dealership
- Allow dealership to prepare “What if” analysis
- Assist dealership in determining break-even analysis
- Provide a template for your use
How Budgets are Effective
- Invaluable business tool for management
- Allow management to plan for future direction of dealership.
- Assist in recognizing factors that are affecting the actual to anticipated results
- Allows for financial information to be accessible to all managers of departments & assist them in growing their department.
- Allows dealer to hold managers accountable for their department.
- Helps the dealer to monitor expenditures throughout the year.
- A forecast is a “what if” exercise
- Assist with acquisition
- Assist with financing negotiations
- Helps with cash flow analysis
Dealerships and Budgets
- Are Budgets frequently prepared at dealerships?
- Why not?
Reasons for Not Budgeting
- I’m too busy
- No one follows up and compares actual to budget
- The dealer statement is too large to perform budget
- There is no reward or ramification for achieving or not achieving budget results
- The department managers do not take the process seriously
The Template Solution
- Template is built to mirror the dealer statement to assist management
- Allows for 6 different scenarios
- Same as last year (2)
- Percentage increase over prior year
- Expenses as Other % of Gross Profit (ie 20 Group / Financial institution)
- Expenses as NADA Benchmark of Gross Profit
- Expenses as same % of Gross
- Other input amount
Worksheets Within Template
- Dealer set-up
- Projection scenarios
- Projection input (this worksheet is the driving force behind the template)
- Projected P&L ( Various sheets relating to page #’s of Dealer Financial)
- Prior year Financial statement (Same various Sheets relating to Dealer Financial)
Keys to Changes
- Column Q within Projection input
- @if Function
- Gross Profit % columns
- Enter your own benchmarks
- Other Input
- Known expenses
- Known expenses
- Why no Departmental breakdown?
- One Major Rule of the Experimental Phase of the Seminar.
- If you have a question ASK
- There are individuals present to assist.
- Project new vehicle sales to be 15% lower than previous year.
- What about Gross?
- Project Customer Pay Labor to increase 10% from prior year.
- Any Questions so far??
- New Telephone contract? Let’s cut telephone expense by 2%.
- Interest rates rising.!!! What to anticipate with a rate increase. Increase Floor Plan Interest by 3%
- Any More Questions ??
- What would you like to change?
- Open discussion and questions.