Dealer statements for PDR shops

What a dealer statement is

A dealer statement is one page, or a few, that lists everything a dealer or fleet owes the shop as of a date: each car's invoice, what has been paid against it, any credits, and the balance left. It is the paper the dealer's office works from when it cuts a check.

Retail customers pay at pickup, and an insurance car is paid by the carrier and the owner. Dealer work is different. A used-car manager sends a line of cars for reconditioning, the work is done over days or weeks, and the dealership pays on terms, usually once a month and usually for many cars at once. Without a statement, the dealer's office matches checks to a stack of loose invoices, and cars get missed in both directions.

Fleets, rental companies and other shops that send work run the same way. Anywhere the work is billed on account, the statement is what turns many small invoices into one amount somebody can approve and pay. That is why door-ding and dealer shops live and die by them.

Invoices and statements are different papers

An invoice bills one car: the RO, the vehicle, the work and the amount. A statement summarizes the account: every invoice still open, or every invoice and payment in a period, and the total. A statement does not replace the invoices; it points back to them, and a dealer that questions a line on the statement will ask for the invoice behind it.

• The invoice is the record of the work on one car, and it is what a dealer approves.
• The statement is the record of the account, and it is what a dealer pays from.
• Every line on a statement should name the invoice and the car it came from, so either side can find it.

What a good statement shows

A dealer's office has to match the statement to its own records, often by stock number. The easier that match is, the faster the check comes. A good statement carries:

The account

the dealership's name as its office knows it, and the store or rooftop if the group has several.

The statement date

the date the balance is figured to, and the period it covers if it covers one.

Each open invoice

the invoice or RO number, the date, the vehicle's year, make and model, and the stock number or the last digits of the VIN.

Payments and credits

each payment received with its check or reference number, and each credit with the invoice it applies to.

The balance due

one figure, said plainly, with the date it is due under the account's terms.

Aging

how much of the balance is current and how much is late, by how long.

Leave off anything the dealer's office does not need. Technician names, internal notes and pay figures belong on the shop's side of the counter.

Open-item or balance-forward

There are two common ways to lay a statement out, and dealers tend to have a preference.

Open-item

lists only the invoices that still have a balance, each with what is left on it. Paid invoices drop off. It is the easier one for a dealer's office to pay from, because every line is something to pay.

Balance-forward

starts from the balance at the end of the last period, then lists the period's new invoices, payments and credits, and ends on the new balance. It reads like a bank statement, and it shows the history of the account.

Whichever a shop uses, it should use the same one for the same account every time. A dealer that receives a different layout each month has to work out the account again from scratch.

Aging: who owes what, and how late

Aging splits what an account owes by how long each invoice has been open. It is the quickest way to see which dealers pay on time and which ones are drifting.

Read the aging by account, not only in total. A shop can look healthy overall while one large dealer quietly falls behind, and that dealer is often the one sending the most cars.

Short pays, credits and disputes

Dealer checks do not always match the statement. A check can leave out a car the office has not approved yet, pay a different figure than the invoice, or cover cars from two periods at once. Each of those needs to be applied to the right invoice, or the next statement is wrong too.

• Apply each payment to the invoices it pays, by invoice number, never as a lump against the account.
• When a dealer pays less on an invoice, find out why before the next statement: a missed approval, a price the dealer never agreed to, or a car that came back.
• When the shop agrees to take less, issue a credit memo against that invoice, so the invoice and the statement both show it.
• Keep a note of what was agreed and who agreed to it. The person who approved the price is rarely the person who pays the bill.

Keeping dealer billing clean

• Set up each dealer, fleet or store as its own account, with its own prices and its own terms, before the first car comes in.
• Put the dealer's stock number on every RO. It is the number their office matches by.
• Get the price agreed before the work, and keep each car's approval with its invoice.
• Invoice each car when its work is done, not at the end of the month in one batch.
• Issue statements on the same day each period, so the dealer's office knows when to expect them.
• Read the aging every week, and deal with anything past due before it ages into the next column.

How a shop sets its terms, whether it charges late fees, and how sales tax applies to dealer work are the shop's own decisions, made with its accountant or attorney.

For the software side of it, see invoicing, statements and A/R aging.