Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. Good morning. Hey. Happy Friday. Happy Friday. I get a kick out of our whole morning show intro thing. Oh, yeah? Yeah. Well, the music part, that's actually one of my kids who was a theater major and did voice stuff. You mean the narration part? The narration. Yeah. And I listened to it and I'm like, I think about think about them every morning that we do this. And, uh, it was also thinking that it's, it's, uh, it's interesting. Just, I was looking at the, the artwork and remembering the morning after we decided to do this, how I put that together and just, you know, it's like, well, we'll do a little of this. We'll do a little of this and make it look like this. And, I like it. It's due for an update. It is due for an update. And I think that we're like at about 340 episodes. So we've been doing this for a minute. It's fun. We certainly enjoy it. And it's Friday. We take Jim's mom to the airport today. I'm kind of sad about it. On her birthday. I can't say which birthday it is. That would get me in big trouble. She is, yeah, yeah. And it's a great drive yesterday up to Bear Lake and other places. And, and so I think that we have sold her on how pretty it is up here in northern Utah. And we'll be back soon, hopefully. Yeah, I enjoyed the tour myself. We took a wide swing. I even dropped into Idaho. Yeah, it was great. It was great. And if y'all haven't, and it's on your bucket list, and I know a lot of people come to ski in Utah. A lot of people come to southern Utah. They come to southern Utah for the national parks and all that. But northern Utah in the summer is really beautiful. And the fall. and in the fall when all the colors start changing. So, you know, if it's been on your bucket list, you live anywhere around here. Um, yeah. And if it's not on your bucket list, get a bigger bucket. Yes. Get a bigger bucket. So, um, it, uh, what announcements do we got anything? Uh, we got a group three meeting on Tuesday night. And Wednesday, you've got your V8 Plus meeting, don't you? Yeah, we're doing a V8 Plus meeting on pricing and markup. Yeah, we've been getting a lot of really great insight from some, and you actually have an interview today with someone from the capital space too. So some really great, high value insights. Yep. And we've been working behind the scenes and, you know, this is where we, we are business owners, just like most of our listeners, you know, as dealers out there in the space and as business owners, we've been working on some elements of scaling our business, working on the technology side, working with potential partners. And, and so, yeah, we're, We're out there chipping away, trying to make our own. Doing what we, what we talk about is like, uh, and it's the whole idea of working in your business versus working on your business. I keep seeing more and more and more people that are actually, you know, that use that phraseology. One of which Tony Robbins just recently, like his big thing right now is stop working in your business, work on your business. And, um, and other ones that are the, the, the, the bigger names. And I know that's kind of where we heard it through some of these, these things. But I've just seen recent new marketing things that they're talking about working in your business or working in your business is, you know, that's more like a glorified job. It's, you know, but working on your business. So, so we're chipping away. We are chipping away. We're, yeah, it's coming. So today's topic is, it's going to be quick. I mean, who finds accounting sexy? yeah and this is not so much accounting as it is management I would say this is more of a conversation around management and how to uh you know how to make these kind of decisions because to me we're talking about the mat the subject of uh posting vehicle expenses and I just see from our work working inside um software that um and we work with a lot of the dms's with our clients and others and of course now through v8 we're we're talking through those things and what I'm seeing is that The reality is that, are we sure we got audio? We do. And it's just interesting because I was just looking at this and the only one that went live was YouTube. So I'm going live right now. They might have missed a few minutes, but yeah, it's very interesting. So yeah. Um, so again, the, uh, the topic that we are going to be talking about today, um, is on accounting, not very sexy, but it's important stuff. And it's stuff that you, you talk to people. I, you know, I, uh, uh, A lot of our clients, you know, it's different questions and we don't get too heavy in accounting, but, you know, it comes up every once in a while about like, for instance, when you're buying a slew of GPS units, dealers will say, you know, does that get attributed to the car? Does that get attributed just as an expense? I mean, where does that land? Yeah, and as I said, I don't view it as an accounting question as much as an administrative question. It's more of a time involved. And so this is why I posed the question, just because in working with dealers and seeing their numbers and seeing how people report, and even in something as simple as V8, watching how people report, try to report and the conversations we have about is this including your recon is this including your recon you know those kind of conversations and it's like it just kind of raised the question for me about um I would just challenge dealers as we think through this and as as we go let's share the slides like the first slide is on fuel and again those of you that that uh are joining us later uh the internet didn't fully connect us to anything on facebook and so yeah it looked like it from our end so yeah so the point is that um the the reality is that these these expenses that we put a poll, we put three polls out, uh, just kind of three different topics, you know, uh, piped in. And so, yeah, we got some comments in addition to the actual poll results. And so the, the, the results are just, just conversation pieces. Like I think it's not a large enough poll to get a feel for what really dealers are doing, but certainly in our observations, um, They sometimes just put a lot of time into, and look, every business owner is different and what they want to see in order to better manage their business. I simply thought today would be an opportunity for us to bring forward the notion that maybe sometimes we don't have to post these expenses to the individual unit. But let's again, let's show the, do you have it? I don't see the one on fuel. uh all I see is jim's laptop we're gonna we're gonna bring up we're gonna add one and we're just gonna go with it and this one is um this one is fuel this is okay so you can see that 88 of the respondents said we charge uh to a um charge it to fuel but not to the unit stock which that was that was encouraging to me it was surprising So, I mean, you know, fuel, that's, you're putting a little bit of gas and people are out test driving, all of that kind of thing. How do you, when you're doing it that way, I'm just curious, how do you mitigate team members just going and filling their own car up? Well, that is one of the challenges. And I think what you've got to do is this kind of reminds me of a, of a story that, and I had this experience in my own dealership where we had people, you know, misusing that, um, the petty cash. And that can be, I mean, gas prices are four, $5 in some places, a gallon. Yeah. It's like, um, yeah, the, the reality is this is something as an example, I just picked three examples. So we're going to talk about fuel GPS and, um, I forgot the last one. We'll see it in a minute. But the reality is, on the fuel side, it's an example of something that there may be $10 and $20 at a time, regardless of how dealers pay for it. It might be charged on an account somewhere, a local fuel source, or it might be sending cash out of a petty cash system to fuel up a car. Either way, The question for me is, does it really matter how much of that fuel, if we go put $20 in some Honda Accord, does it matter if we charge that $20 of fuel to that unit? And if you start to really break that down, in this case, we're taking a $20 fuel ticket. But I think the reason I wanted to raise this question is, what difference does it really make how much money we put into that one unit so for some dealers they they want to know like how much money do I have in that one car and I just kind of wanted to challenge the thought process with this these polls and this one is the simpler one like fuel is to me is something that does is better managed in a in a bucket of saying you know I don't I don't care if the 20 is in the court or the civic you see what I mean so so now this one suggests that dealers are doing that with this particular um this particular one we can look at the other ones with gps and let's take a look at this one is a little bit harder to to um to see i don't know let me see if I open my screen if I can read a little better um a little bit yeah so um this one is shop labor so this one's trickier because not everybody has a good software system in the shop side to be able to really differentiate that so if you have a good song there are good softwares out there to be able to do that yeah so so I think that We certainly meet a lot of dealers who aren't using any kind of software in their shop. We also obviously meet a lot of dealers who aren't doing the reconditioning in their own shop. Which makes it a little easier. Yeah. So I certainly think, obviously, that dealers ought to track their labor hours, figure out how much labor is going to a unit. I think the part that I'm really questioning is... Is it important that we, from an accounting standpoint, let me just give you an example. I have one tech who works on three different cars today. In my shop software, I know that the tech's labor hours went to these three different units. Now the question is, do I need to track that and bring those dollars as an expense or post it to the individual unit in my DMS before I'll sell it so that I know my real cost in that unit. So the quote unquote real cost. Okay. So see where I'm going. But I mean, parts are attributed to the parts are easier, but I mean, not that there's a lot of dealers out there that, um, that have shop people in the shop that are like, we got nothing to work on. Um, Because that doesn't happen very often. But I mean, your shop people are going to get paid one way or another. They get paid. And for most dealers, that's one of the harder ones, it seems, as I'm watching social media. It's one of the harder ones to find good quality people that will stick around and really work with a dealer is the shop. yeah I think that's a different question like for me that that most shops are telling us or most dealers with a shop and even the ones who are using outsource shops they're really telling us I can't get my cars through fast stuff which means which you could infer means that the dealer that the the techs are busy like yeah they're putting in their 40 hours if it's 40 and they're they're putting in their 40 hours now it's just a question of which units are they actually giving their time to so that's what the question was really for me about today is like If I know in the shop, and just let's go back to that example, a tech worked on three different cars today. So their eight hours of time in the shop, as an example, are split between three different cars. And I have that in my shop software probably. The question is for me, and it's a question. It's not a statement. It's really just a question because this is getting into some really – some kind of nebulous things that can be challenging to manage. And the reason I raised the question today was, do we, do we really need to know in the DMS, like when we sell a car and we want to report our gross profit, and especially because we've had conversations in the past about dealers pricing from cost. So if I know that this tech put five hours, you know, last week into this accord and, Is it important to the success of the business and to daily operations to be able to go and move those five hours of labor into the DMS and post it as an expense to the unit? And so my question is, why would we need to know that in the unit itself? It's really just a question to challenge dealers to think about, because if the answer is no, I'm satisfied with having that in my unit, shop software or I'm satisfied having that in my QuickBooks because we know still are writing payroll checks and we know what our labor is. So the question is from a really detailed standpoint, do I need to know which hours went into which units? That's really the purpose. And I can really see either either side, especially when it's like this is a trouble vehicle. And one of our shop people have been on that car all day long for the last four days or whatever. It's like that is where all of their time has gone to this specific car. Okay, so if that's true and I have an extra $1,000 or $1,500 of labor. It shouldn't really make any difference on the price of the car. Well, that's really the question is. You say it shouldn't to you, but to some dealers it does. And so I'm really just raising the question of, where where does it help to know that information how does it help a dealer to know that those labor hours went into this car as a result my cost is this because I see some dealers getting super analytical about granular in this car really granular about my cost in this particular car and I i just it just to me it's a question of is that an appropriate investment from an administrative standpoint let's read the results for those who are not seeing the screen um this poll number three of three was on labor in the shop and it's 80 so let me just read the questions um the first option I posed was we track shop shop labor by stock number but do not post it to the unit So that was... They track it. They have a way to know which labor time went into which vehicle. And so 20% said that's what they do. They don't post it to the unit. The other 80% said we post all labor to a labor expense, but do not track it by stock number. So both... all the all the respondents said they don't put it to the stock number which surprised me because I feel like we see dealers who were doing that um again our poll results were were a bit low but the the question is that nobody said they're actually putting those hours to the individual unit which is encouraging to me I just think it's it's really a question of Two things. It's how much time is it worth for us to put somebody on that project of going and posting those expenses in the DMS? Well, and if you've got the software, it makes it a little easier. But, you know, not every dealer has the shop software that can show that. But then it's really forget the shop software and talking about just the DMS, like having that information. If I say, OK, that's the techs put three hours into this accord. And now I have it. Now my cost in the accord is X. How does that help me from an operational standpoint? And does it help me or does it work against me to know that am I pricing from cost? Because we've gone through this. We talked about pricing recently. Our V8 Plus meeting next week is about pricing. And you know that I typically advocate for not pricing from cost. I had this conversation with a dealer just the other day. He's like, We have our own methodology that we recommend for pricing. And while it certainly factors in cost before you actually put it on the block. But not solely from cost. Because you hear people like how you do the math, double the cost, add $1,000. It's like the most spit out common. That's been around for decades. I'm surprised to see how many dealers are still following that practice. Still doing it. And so, yeah, we went into some depth. And we had Steve Burke from Agora came and talked to us on behalf of our V8 dealers to speak to. And then Brent Carmichael also. And so we've got quite a bit of in-depth information about that from those seasoned experts. And I just think from my standpoint, I'm trying to help dealers. Of course, we want them to have good information. It's really just a question of the layer of administration and then the question of when you put it on the vehicle, what does that help you do? What do you now know? And what do you do with that information? Well, and, you know, we, we talk about paralysis of analysis and, and, you know, we've worked with dealers that just, that measure everything and just like micromanage and measure everything. And they go fricking nuts. Yeah. um it's just it's so much and their their anxiety and stress level is much higher than it needs to be I'm glad you mentioned that because that is part of what I see with the administration it's like you you feel like you there's there's stress level uh around some of those kind of things and I think sometimes we can alleviate some of that stress if we will let go of some of this um detail that could really be either tracked in only one software or only one place it It's still going to go into your accounting. It's still going to reflect it in your QuickBooks or whatever your accounting software is. I'm not suggesting we don't do that. You're going to know what your cost of sales are, your shop labor, all of that stuff, on an aggregated basis. My question really is, does it belong in the individual detailing unit? And I know dealers are hearing my voice right now and saying, I'm absolutely going to continue to track that on an individual unit basis. And if it serves them, fine. Well, and it's, you know, I... from my perspective, uh, um, and I'm not a buyer payer dealer. Um, no, I play one on television. So, um, not a buyer payer dealer. Um, that, that, um, to do it so that it's in aggregate. I mean, I, that makes an awful lot of sense unless you're seeing something really screwy happening. And it's like the numbers are way off and then you stop and you do, it's, you know, it's, um, it's like a deep audit or whatever. And, but not on a day to day tracking. It's like, there might be reasons why, um, you would go in and it's like, how much time did we spend? And, and just to kind of see, is this a shop problem? Is this, we're buying the wrong kind of car problem. I mean, what kind of, if, if you're only getting, you know, you're normally getting 10 cars a week out of recon and it's dropped down to four or five. It's like that. Then it's, I can see kind of going in and taking a deeper look, but not doing that in accounting. Yeah. Yeah. Well, and again, I want to be clear. I'm not saying don't track the hours on the Accord versus the Civic. I think dealers should have that detail. But not in accounting. Well, not in the DMS that we use to track the cost of the car, which tells us how much markup we had in the car. We have this question come up in our VA groups because... You know, when and so we just put it over on kind of our tracking sheet for members so that every member can know this dealer does include labor. This dealer does not include labor. So they can at least kind of, you know, make more apples to apples. Yeah. And so you can kind of know what you're dealing with. But I guess my point is, I'm not I'm not saying don't. have it available to analyze I'm simply questioning whether it belongs on an individual unit because that was the purpose of the poll asked do you post it on an individual unit in your dms and and that just begs the question of you know is that extra layer of administration is it Does it, what does it really do for the dealer to have that in the DMS and know, you know, what their sales price. And so our last one was on GPS units. So this one, the question was, yeah, it's very close. I mean, but, but I would say they say 57%. So the question reads regarding the posting expenses, how do you handle GPS units? And we post each GPS to the individual stock number and, And that answer came back at 57% said they put it to the individual stock number. Certainly, let's clarify. Certainly, you're going to go attach the GPS unit to the stock number in the software because those things have to be synchronized. I'm talking about the cost, posting the expense of the unit to that particular car and this one came up for me way back when I had my own dealership and just an example if you get 20 gps units delivered now I go post those expenses to those particular cars and and it just starts to get watered down when you start to think okay so I put it on 20 units Five of the 20 repossess in the next 18 months. I recycle. We hope we recover those GPS units and put them on a different car. And so now the question is, why do I need to put it on the individual unit at the beginning? Because that unit is either going to get recycled and sold again. And I now have the feeling that I have less expense in that unit because I'm not posting a new GPS, which in theory is technically true. But it's like, why do I need to know that, that that particular unit had a GPS expense? Yeah. It was really about raising the question for people and give them an opportunity to go back and analyze their own processes in terms of what information really is useful. I can tell you in my own situation, I landed pretty quickly on the idea that I'm just going to post it as a collection expense. It's going to show up on my profit and loss report. And each unit is going to get a sign. Because that's what it's used for, is for collections. Yeah. That's right. And so to me, it was a collection expense. And so I charged it to the finance company who was owning the paper, right? They were the ones who had an interest in the GPS because they owned the paper within days. And so I chose to make it a collection expense. But it's like, I think it's just, it raises the question. So I need to finish reading the other part. It says the other one was we post the entire invoice, multiple units to GPS expense, not the individual unit. And 43% said that that's what they were doing. So more like what, what I was choosing to do. So it's really about just raising the question for dealers and letting them think it through for themselves and make a judgment. Is that extra time and administration? Yes. It's not about a right or wrong. It's about where do you want to spend your time? Yeah. And is that time serving you well for somebody to sit? If I'm the administrative person, I've got the administrative duties and I got an invoice in here for 10 GPS units and I'm going to go. you know, put the, this, which, which, which car did this one go to? You know, cause I got 15 cars back there and we got 10 units, which now I have to figure out which ones went where. And I'm like, why does it, why does it, how does it help me to know that? And so I'm just saying, maybe we're, maybe we're spending a little bit of time and kind of being inefficient in, in posting those things individually. And I can, I just, from the three things that you mentioned today, I can see, aggregate gas aggregate gps it's when it gets into shop exp you know the how much time is being spent per unit that would probably be a little bit more murky for people to um to go we can go aggregate not a problem at all where they might want to to to look a little bit deeper in that absolutely no I'm not saying don't have that one I'm just simply saying the question is Do you put it in the DMS? Yeah. Cause most, you know, QuickBooks can do what we're talking about here. QuickBooks can tell you which units had which expense. So as far as my ability to go get the information, it's really just a question of what do I gain by moving in into my It's a question. Again, it's not a statement. It's like, what do I gain by putting in that extra time to put it in my DMS so that I've got, you know, that extra labor assigned to that unit? Is there anything, you know, when you... there would be nothing in the capital side when you add those extra expenses to the vehicle. There could be, that's a good, I'm glad you raised that with some capital providers, they're going to advance based on the cost and the unit. So you might, so you might want to say, I've got an extra a hundred dollars here for the GPS unit and I've got an extra this for that for the labor. So there's a reason why if, if you are in cap, if it's a big part of the capital, um it just begs the question though let's go back to it it begs the question and I pose this question to both um steve burke and to brent carmichael for these interviews I did in recent weeks but it's like if I if I'm doing that and i I have two units that I buy. You've heard this example plenty of times. I have two units that I buy, and I discover that one of them, you know, I made a bad, I overlooked something. Or maybe I just developed AC quit on the way home from the auction or whatever. So now I have extra parts and labor in the second car, the green one, we'll say. And so now it begs the question. So my lender is now going to advance me more money on the green one because I have more money in it. is that going to affect my pricing to the consumer? Well, and that was the question that you had for Brent and for Steve and all of that. We were talking about pricing and markup. So it really is an exaggerated example to say, so it kind of attaches to what we're talking about here. It relates in that If I post those expenses and I see that I own this car for more, how is that going to affect my pricing? Like when I choose to go to pricing, if I'm pricing from cost, then the fact that I have more labor hours in this one, is that because the mechanic was working? and slower is it because we're waiting on parts and we whatever it's like I think or where we can get ourselves a little out of whack is when we start to price from cost and we say we have more cost in this one so it should be priced differently and I think should it like I you know it's just it's against well and that's that that's a much larger question and and I know you put together a tool um uh and as we develop and we start working more and more with the the tech side that was that might be a tool that becomes available to to dealers for pricing and it's like what's the condition what's the and and and learning to price through that and making sure that that uh you know, when someone steps on the lot and they go, why is this green accord that is a, you know, 2020 priced at X, but this blue accord 2020 is priced at Y. And, um, you know, it just makes a difference. Yep. Well, we can wrap up there. I think we'll get a quick mention in here for one thing. I want to get this, um, this, oops, I lost it. Um, I was trying to put the coupon code. There it is. The coupon code for, I forgot to mention on the start of the show that we've got that mastermind event coming up on the front end of the CIADA convention at Myrtle Beach. We definitely encourage people to get there if they haven't. You're going to be there. Yeah, get yourself booked and get over there for that. That mastermind is, everybody talks about that. We have heard such great things about, you know, the value of that. That's Tracy Myers and Troy Spring. Absolutely. Bringing that together. And so we wish them lots of luck and lots of dealers in the room for that event. And wish we could be there ourselves. on code to get yourself a discount. B-H-B-H-M-S for Morning Show. Hey, everybody. Thank you so much for joining us today. We really appreciate your support. And, you know, know that it takes a little bit of your time away from other things. Or maybe you're just catching this on a rerun on your way to the auction. We do appreciate you listening. And if there's something you'd like to hear us kind of break down or bring a guest in or something like that, please reach out to us and let us know. And yeah, it's Friday. Enjoy your Friday. And we will see you on Monday. Have a great weekend. Thanks, guys.
