During the depths of the recession, Texas dealer Greg May knew he needed to look at all options to limit expenses.
After scrutinizing monthly financial statements with his office manager, May realized that he had to involve all of his department leaders.
"I said, 'We really need to be concentrating on these things all the time,''' May recalled. "We need to make good decisions on these expenses, and we really need to share all the expenses for all the dealership departments, so we could all learn from them."
The weekly expense review meeting was born. In 2009, May and the managers at his Honda store in Waco, Texas, and Chevrolet store in West, Texas, began to set aside the first part of their Tuesday management meeting to review the previous week's bills one by one. A so-called redline report is created at the end of the month with a detailed spreadsheet for each vendor to help managers catch anomalies.
May saw big results from the beginning. Expenses dropped 20 percent in 2010, the first full year of the program. At the Chevrolet store, monthly expenses fell from $325,000 to a steady $250,000 today. At the Honda store, monthly expenses are down $25,000 a month.
The reductions have touched all areas of the dealership from office supplies to head count, May said. Some porter positions were eliminated when managers questioned whether they were needed after seeing that some porters stood around with long waits between customers. Scam billings -- solicitations designed to look like invoices or bills for services that hadn't been authorized by dealership personnel -- also were weeded out more effectively.
The review uncovered a leak in the Honda store's sprinkler system when managers questioned why the water bill had spiked. It also led to lower electricity bills: Covers and locks were installed on thermostats so employees couldn't bump up the heat in the winter or lower the air conditioning in the summer.