With tax season fast approaching, it’s more important than ever to ensure that your dealership’s finances are being dealt with in the most efficient and straightforward way possible.
Many dealership management systems (DMS) provide in-system accounting solutions that they advertise to be “specifically tailored to dealers.” These “solutions” however are steps beneath the cloud-based accounting software available to dealers today and require a lot of training and money to master. So why do dealers not switch? Unfortunately, there is a lot of misinformation floating around the industry. Fortunately, we’re going to debunk them today.
1) FACT: DMS is expensive and so are their accounting solutions
It’s no secret that DMS is expensive – right? While on the surface it may appear to make more financial sense to migrate to a “one-size-fits-all” DMS provider, we encourage dealers to unpack this a bit more to realize some potential pitfalls in the long run.
Most DMS providers charge extra for their “proprietary” accounting solutions. When it comes to moving over your existing financial data to their system, you are looking at several weeks (to several months) of set-up time depending on how much you need to bring over. This takes time away from learning other parts of the DMS, your team, and your customers.
2) MYTH: DMS accounting solutions are easy to use
A key point to remember when considering using a DMS operated accounting solution is that these systems are created by DMS providers, not accountants. These systems are “specifically designed for dealers;” however, they are not well known, adopted, and are easily decades behind best in class solutions. For this reason, it not only takes dealers, but also their accounting team, ages to learn, adopt, and implement. Your accountants were trained on industry-leading solutions like Xero and Quickbooks – it’s about time they work with systems of this caliber.
So, what is the best dealership accounting solution for your shop?
We’ve established that DMS-based accounting systems aren’t the way to go, but what’s the solution?
It’s a lot simpler than it seems. Companies like Quickbooks Online and Xero have been ahead of the game for decades. They provide best of breed accounting solutions across the globe. The best part? They’re systems your accountant is familiar with AND there are many DMS’ that integrate with them.
Here are just a couple reasons why you should consider switching to a DMS that has third-party accounting integrations:
1) FACT: Your accountant prefers to use industry-leading solutions
If you’re used to using QuickBooks or Xero, you probably wouldn’t want to use a system that’s a step back – right?
Accountants were trained on these industry-leading software – not niche DMS accounting. By choosing a DMS that integrates with an accounting software that your accountant already knows and loves, you are saving valuable time and money. There is no extra training, no additional resources, and no learning curve.
2) MYTH: Dealers can’t bring their existing financial data to a third-party accounting integration
If you have ever migrated your data to a new DMS, you understand just how much time and resources it takes. Dealers who operate their shop using Quickbooks Online or Xero will be able to transfer their financial data with ease to any other DMS that integrates. Dealers who are using DMS accounting software, however, will not be able to seamlessly transfer their financial records if they choose to change DMS providers.
This tax season, we urge dealers to address the financial elephant in the room by outsourcing accounting to a trusted solution. This not only saves you and your accountant time and money, but also provides your shop with the most up to date and accurate financial information.