From File Cabinet to CD

A tidal wave of popularity in electronic data archiving has hit auto dealerships during the last few years. One of the main reasons is to avoid drowning in paperwork.

Dealerships using electronic archiving no longer need to print the voluminous journals, schedules, reports and document copies generated by the Dealer Management System (DMS) computer. A year's worth of that stuff can fit on a single non-proprietary CD-ROM or, in some cases, be made accessible on a secure Internet web server.

Retrieval of the data from the CD or the web server is simple, easy and available to anyone with PC access, a valid username and password. Usually 15 or 20 minutes of training is all that's needed to show users how to archive the data and retrieve their reports once it has been processed.

The Internal Revenue Service looks kindly on electronic data archiving. IRS Procedure 98-25 states, in so many words, that data created by an automatic data processing system must be archived electronically and made available to the IRS auditor. Many audited dealerships have reported favorable results with electronic archiving.

Paper document storage in an automobile dealership can be laborious and time-consuming and require much storage space. Retrieving paper documents can take even more time.

With data archiving, these documents no longer need to be filed. In fact, they no longer require printing.

“Although computers have increased to warp speed and mainframes can crunch more numbers, the amount of paper flowing out of these systems does not seem to have abated,” says Desmond Doris, president of Kodata Solutions. “If anything it has increased.”

Although scanning is now available through some of the DMS suppliers, it is often expensive and can tie the dealership to the supplier forever. To retrieve scanned documents, the DMS box that archived the original must generally be used and that too can be very expensive.

Once all data has been accumulated on a CD it just makes sense to use it for various purposes. Some data archiving service providers offer to build specialized reports from this data. In many cases reports such as asset management, expense analysis, floor plan reconciliations, financial statements and other customer designed reports are being provided using the data from the CD.

The data archiving industry is providing additional services. Scanning of critical documents such as deal jackets, hard copies of repair orders and vendor invoices are being done with sophisticated scanning equipment that can record both sides of documents ranging in size from a business card to a finance contract.

Once documents are scanned, they go into a document management system. Then they're sent to the proper person in the dealership for action.

For instance, deal jackets can be forwarded to the office for billing. Vendor invoices can be sent to the proper person for approval. It reduces the chances of documents being lost. It decreases the amount of time it takes to get them processed. All scanned documents are available on a web server and are retrieved in the same manner in which documents are retrieved from the CD-ROM.

Data archiving of dealership records is the new wave. Catch it and ride the benefits.

Don Ray is a Senior Member of the George B. Jones Dealer Services division of Dixon Odom PLLC, a national accounting and consulting group for automobile dealers. He's at 901-684-5643