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How Inventory Accounting Methods Affect Your Tax Bill
If your business involves the production, purchase or sale of merchandise, your inventory accounting method can significantly affect your tax...
3 min read
Baldwin CPAs 4/18/25 7:45 AM
Every extra day a vehicle sits on your lot is capital underutilized, interest charges accumulating, and gross profit evaporating. In Kentucky’s competitive market—where days-to-turn averages run roughly 70 for new and 40 for used—a ten-day reduction can free up six figures in liquidity and slash carrying costs by thousands each month. But shaving days-to-turn requires more than gut instinct: it demands data-driven pricing, disciplined incentive structures, and cross-departmental collaboration.
The Foundation: Accurate Reporting & Goal-Setting
1.1 Why Segment New vs. Used
1.2 Establishing Your Current Baseline
1.3 Setting Stretch Targets
Dynamic, Data-Driven Pricing
2.1 Leveraging Repricing Tools
2.2 Manual Overrides & Guardrails
2.3 Case Study: Lexington Toyota
Structured Incentive & Markdown Framework
3.1 Time-Based Incentives
Age (Days) |
Action |
Expected Turn Improvement |
Margin Impact |
0–30 |
Standard rebate/incentive mix |
Baseline |
0% |
31–45 |
Add targeted $500 consumer rebate |
+10% velocity |
1–2% off MSRP |
46–60 |
Manufacturer special financing package |
+15% velocity |
2–4% off MSRP |
61–75 |
Dealer cash & digital-only rebate |
+25% velocity |
4–6% off MSRP |
76+ |
Wholesale export to auction or block |
Final liquidity push |
8–12% off MSRP |
3.2 Coordinating with OEM Schedules
3.3 Digital & Local Promotion Tactics
Cross-Functional Collaboration to Drive Velocity
4.1 Sales + F&I Alignment
4.2 Service + Parts Synergy
4.3 Marketing + Finance Collaboration
Monitoring, Refinement & Continuous Improvement (≈150 words)
Conclusion
By fusing automated, data-driven pricing with a disciplined markdown framework and cross-functional playbooks, Kentucky dealers can slash days-to-turn, unlock critical floorplan liquidity, and protect hard-earned margins. Implement these strategies in concert, and watch aged inventory woes transform into a streamlined, profit-enhancing engine.
1 min read
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