Issue link: https://read.dmtmag.com/i/561797
www.PowersportsBusiness.com SOLUTIONS Powersports Business • September 17, 2015 • 29 Do you have adequate internal controls in your dealership? Let's drill down on that question and take a moment to consider the follow- ing. Are you: Protecting your company assets? Ensuring accurate financial records? Promoting compliance with laws and regulations? Achieving effective and efficient operations? Our gut reaction is to respond with "You bet I am." Chances are you are doing some things to ensure control, but leaving many others out. Internal controls are managerial business practices that make sense. They protect assets, create reliable financial reports, promote compliance and achieve the effective and efficient operations we all want and need for success. Internal controls are more than just the regular things we do to detect problems or errors. They also include a control environ- ment, risk assessment, communication and monitoring. All of these have to be in place to have sound internal controls. One person can- not be everywhere at one time. Having internal controls will make a difference in the way your dealership runs, and the outcomes. CONTROL ENVIRONMENT Is the message sent to employees clear and easy to understand? Internal controls are important. Your dealership has them for a reason, and they need to be followed by all. I worked with an owner two years ago who had me create some controls for his dealerships. When I returned a year later the first words from the staff were: "All that hard work you did, putting the controls into place, was a waste because they have not been enforced." Even though I suspected that would hap- pen when I left, I was pretty upset. I had worked endless hours to implement them at his request. I was disheartened he had not followed through on, or made clear, the con- trols he wanted. RISK ASSESSMENT Analyze and reduce; make a plan. Analyze the areas of the business with the highest risks. Places to look are areas where there are many complaints, staff changes, or problem areas. Train key staff to look for recurring themes or patterns. I once caught a person stealing from the deal- ership. He was returning the same item about the same time each month. He did this nine months in a row. None of the staff caught it because they were not looking for patterns or repeated themes. It was actually quite easy to find. COMMUNICATION Every organization struggles with communica- tion. When enforcing controls, the commu- nication starts at the top and flows down. The staff must know that when a communication comes down, it came from the top. At the same time, as the owner, you need to ensure two- way communications. Your staff needs to feel like they can come to you with any problem, question, concern or suggestion. It is the staff that will make controls successful. They have firsthand knowledge. Listen to them and let them be a part of this process. You will gain amazing buy-in results. MONITORING Monitor the controls you have put into place to be sure they are being followed. Test and review them regularly; they must be success- ful. Do not be afraid to adjust them as needed, no matter whose feathers will be ruffled. Internal controls are a way to prevent costly mistakes from happening. Whether it is fraud, problems with financials, damage to the deal- ership's reputation or problems with the law, internal controls are needed to help your deal- ership succeed. PSB Paula Crosbie is the training development manager with CDK Global Recreation. She has been training and consulting with powersports dealers for 13 years. She can be reached at paula.crosbie@cdk.com or 801/519-7570. Use internal controls to help minimize risk FOLLOW ME PAULA CROSBIE