4 Ways Centralized Accounting Can Improve Your Dealerships’ Profitability and Efficiency


Key Takeaways

  • Moving to a centralized accounting function can help improve your financial operations and increase organizational value.
  • More effective management and enforcement of policies and procedures are critical to success.
  • An overall reduction in administrative expenses from centralized accounting can be reinvested in upgrading technology to improve future operations.

When you own multiple dealerships, managing and coordinating all financial activities is essential. Implementing a centralized accounting function may prove more efficient and profitable in the long run.

Centralized accounting refers to on-location staff that deal with all payables and receivables. When each dealership operates independently, financial reporting and controls may not be aligned. Moving away from decentralized accounting minimizes inconsistency and strengthens your organization.

Benefits of Centralized Accounting

Here are four ways a multi-dealership organization can benefit from moving to a centralized accounting environment.

1. Improved Management of Operations

Consolidating your accounting function can provide your organization with a single point of control and visibility over all your financial transactions and records. It will allow you to streamline processes and enable more efficient management of policies and procedures.

It’s important to remember that the structure and enforcement of these centralized policies and procedures are critical to success. Controls over cash, car deals, accounts payable, etc. have to be clearly defined. There must be strong oversight from the leadership team as well as accountability.

2. Better Risk Management

As you create clearly defined accounting standards, they can be implemented more effectively across each dealership. In addition, your internal financial controls will be inherently stronger and monitoring them will be easier.

A centralized accounting system can help you identify and manage financial risks more effectively. By pooling resources and expertise, your organization can develop stronger risk and mitigation strategies.

3. Increased Organizational Value

Moving to a centralized accounting function can help you increase your organization’s value. Consolidating accounting tasks can lead to a reduction in unnecessary administrative expenses, improve profits, help improve competitiveness, and result in a stronger financial position.

Streamlined accounting is essential for growth and success by ensuring accurate numbers for financing and investor relationships.

The cost savings your organization accrues by moving to a centralized accounting environment can also accelerate needed technology investments. More robust technology can improve overall efficiency across your organization and strengthen future operations.

4. Leverage Employee Skills

When it comes to implementing new technology due to consolidation, your staff will have the opportunity to learn new skills. Although change can be challenging, it can also empower your employees to concentrate on value-added activities.

Access to real-time data through technology streamlines operations and allows your team to focus on high-value tasks. Automation eliminates manual data entry, freeing up resources for more impactful work and improving job satisfaction.

Key Considerations Before Centralizing Your Accounting

Making the transition to a centralized accounting environment can be complex, but it doesn’t have to be overwhelming. We’ve outlined the questions to ask and key areas you should consider before centralizing your accounting functions.

Key Questions

  • How do we get the deals posted?
  • What do we do about on-demand checks?
  • How do we deal with accounts payable?
  • What do we do about payroll?


The number one concern of general managers at a non-central location is the lack of staff support at the dealership. How each of your dealerships are staffed on location is going to depend on the volume of the store, along with its proximity to its central office.

For example, a high-volume store located within a mile of your headquarters is not going to require the same staffing as a similar-volume store located two hours away. The key to overcoming this obstacle is to ensure the staffing on location is highly competent.


Another concern with centralized accounting is sending paperwork between locations. Developing strong policies and procedures and enforcing them will be essential. You’ll want to use secure sites and take advantage of digital communication as often as possible.

At times, you may need to use more traditional methods such as lockboxes containing deals, cash, and so on. If information needs to be delivered overnight to a central location, negotiate with the carriers as significant savings may be possible.

Improving Your Dealership’s Profitability and Efficiency

If you need help answering these questions and the specific issues unique to your dealership, outsourcing is an effective business strategy as it gives you access to specialized knowledge, expertise, and resources to develop the best accounting structure for your dealership.

Eide Bailly’s dealership advisors can provide you with strategic advice on best practices for internal control design and implementation, staffing needs and salary guidelines, and assistance with transitioning to centralized accounting.

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