5 dealership performance reports management must track

Business reports and analysis are equivalent to using a thermometer if you’re sick. The results inform your business’s health like the latter tells you about your bodily health. The proper performance reports can inform you of where your dealership is and give you insight into what you need to focus on in helping to improve how your dealership’s business functions.

However, knowing which performance reports to track can be a challenge. Fortunately, there are a few key reports you can focus on to get started. As you progress in report tracking, you can use software to create dashboards to monitor key performance indicators or KPIs more in-depth.

Net profit margin

Financial analysis is crucial to the inner workings of your dealership. There are a variety of metrics you can take, but if you need to get started with one, the net profit margin is a solid one to make a priority. Net profit margin allows you to see if events like an increase in revenue result in profit.

First, you will determine gross profit, revenue minus cost of goods sold. You’ll then subtract all your operating expenses. This calculation will give you net income. Once you multiply net income by 100 and divide by revenue, you can see how much of each dollar is profit. Ultimately, this metric allows you to see your dealership’s profitability.

Return on investment

How do you know if the money you spent on a maintenance advertising campaign or employee training program is giving you a positive return? Every dollar spent on a budget in the functional departments at your dealership is an investment, and there is a way to track if the investment contributes to your bottom line.

Return on Investment or ROI is a straightforward way to get a snapshot of whether an investment was profitable. Find the current value of the investment. For example, in a marketing campaign, you could see how much revenue you brought in that can be attributed to the campaign. Take the current value, subtract the investment cost, and divide it by the investment cost to see the return percentage.

Sales and service professional employee analysis reports

One of the most crucial aspects of running a dealership is ensuring that your team is performing at a high level and aware of where they need to improve. Routine meetings between managers and employees allow them to provide feedback and set goals and benchmarks for your sales and service teams.

Each manager should have detailed employee performance reports that showcase their strengths and where they can improve. Use these reports to show benchmarks and goals to see how employees perform over time.

Wholesale profit and loss

A wholesale profit and loss report can help you look at the performance of a wholesale purchased vehicle from when you bought it to the final sale. It allows you to see which of your wholesale endeavors are the most successful, improve your dealership’s efficiency, and see which cars perform best when they get on the lot.

This statement can also help you determine if you have increasing inventory costs (or growing profits) and what you can attribute this to (ex., a slowdown or uptick in sales or a general change in wholesale prices over time).

Employee turnover

Training employees can be a significant expense. According to the 2020 Training Industry Report by Training Magazine, employers spent $1,111 per employee on training in 2020. This cost can become even more of a problem if you constantly have to train employees due to large turnover. Therefore, you want to track your turnover either monthly or quarterly.

This calculation would look like taking the number of people who have left over a specific time, dividing it by the average number of employees, and multiplying that number by 100. Doing this will allow you to see if you have a turnover issue, and then you can address it by meeting with employees to develop strategies to slow the turnover.

Final thoughts

You can look at many metrics when keeping an eye on your dealership’s performance. You want to make sure you’re addressing your monetary resources, human capital, and inventory when deciding which KPIs to keep track of. Create a dashboard of performance reports that are the most important to you and your dealership. Doing so will allow you to track your dealership’s health.