Every dealership has its version of “everything’s fine.” It’s usually said just after someone asks a financial question that doesn’t have an immediate answer. The phones are ringing, the sales team is caffeinated, and the service dept has customers in the drive. On the surface, it looks like a well-oiled machine. But behind the office doors there are several months of unreconciled bank statements, a schedule that hasn’t been cleaned in three quarters, and a lingering feeling that maybe, just maybe, something important is being overlooked. I’ve spent over twenty years in those rooms, invited in just as the wheels start to wobble, and I’ve learned that most dealership financial crises don’t start with a bang.
They start with silence.
Over the course of my car business career, I’ve spent a lot of time with numbers: profit and loss statements, balance sheets, reconciliations, schedules. But really, what I’ve spent my time doing is helping car dealerships stay financially strong, resilient, and positioned for long-term success.
While Kruse Control Inc. moved into digital marketing back in 2010, the foundation of my work has always been financial and operational strategy. Marketing and finance, as it turns out, are more connected than most people realize. A strong brand builds revenue. But it’s what you do with that revenue – how you manage it, protect it, and reinvest it – that truly determines whether the dealership grows or stalls.
The Cracks Beneath the Showroom Floor
After years of poring over financial statements that looked like ransom notes, I’ve become fluent in a dialect of dysfunction that some GMs and dealership principals normally don’t hear. Like a strange regional accent, financial chaos often starts subtly. A missing signature here. A reconciliation skipped “just this month.” A controller with the people skills of a dial tone.
Then one day, usually when the dealer’s on a boat or the CPA’s on sabbatical, the wheels come off.
People call me in when things are going terribly wrong. Not when they’re kind of bad. Not when they’re iffy. But when things are so bad, it’s impossible to make sense of it and the most simple numbers don’t add up. That’s when I get the call.
The most important insight from these situations? Financial challenges rarely happen overnight. They develop slowly, often quietly, until one day a cash flow problem or a bank audit reveals that something critical has been overlooked.
Patterns That Predict a Dealership Financial Crisis
After years of reviewing dealership financials, some neat and orderly, others the accounting equivalent of a junk drawer, I’ve learned that most operational crises don’t crash in like a thunderstorm. They drift in slowly. A little fog in the morning. A missed detail here. A shortcut there. And then, suddenly, an auditor is asking why the flooring doesn’t match the inventory, and everyone in the room starts blinking a little too fast.
In nearly every crisis I’ve helped untangle, the signs were there long before the panic. They weren’t dramatic or loud. They were more like background noise: easy to miss unless you knew what to listen for. These patterns tend to show up in familiar ways, and over time, I’ve learned to spot the root causes with some consistency. In fact, they often fall into a few well-worn categories.
Meet the Players
-
Unskilled or low-skilled personnel
Not unmotivated, not lazy, just never trained properly. Sometimes they inherited a mess, sometimes they created one, and sometimes they don’t know which is which. One person once told me they’d been “doing it this way since Windows 95,” and I couldn’t quite tell if they meant that as a strength or a cry for help. -
Disjointed management styles
Different departments working in different directions. One manager runs a tight ship, another prefers organized chaos, and a third believes everything can be solved with one more spreadsheet tab. Individually, they’re talented. Together, they create a kind of unintentional resistance. -
Lack of oversight
Trust is a beautiful thing, but in accounting, it pairs best with verification. Too often, processes that should involve checks and balances get reduced to one person’s best guess. And while that person may be trying their best, they’re also ordering lunch, reconciling WIP, and trying to remember if they sent that wire transfer. -
Poor leadership
Not for lack of care, but for lack of bandwidth. I’ve worked with brilliant leaders who were so focused on sales volume, vendor meetings, or the next acquisition that they didn’t realize the day-to-day operations were drifting off course. When things run smoothly, it’s tempting to believe they always will. -
Absence of monthly expense reviews
I often ask, “When was the last time you reviewed this?” and the answer is usually either “a few months ago” or “we meant to.” Expense reviews don’t just catch errors, they show you where your business is evolving. Skipping them is like driving with one eye closed. You might get where you’re going, but the odds aren’t great. -
Inadequate involvement from CPAs
Many dealership CPAs are competent and caring, but their impact is limited when they’re only looped in at year-end. Without consistent engagement, they miss the nuance and patterns that could prevent bigger problems later on. I always say, a CPA is not a fire extinguisher. They work best when you don’t wait for smoke.
These aren’t dramatic missteps. They’re just slow-building issues that eventually become loud. And by the time the alarms go off, it feels like the crisis came out of nowhere. But it never really does.
None of these are failings. They’re simply gaps. And like any gap, they can be addressed with the right structure, support, and mindset.
What Happens When Those Gaps Widen
When these conditions go unaddressed for too long, it often leads to what I call a DEFCON moment: a period of high alert where dealership leaders suddenly become aware that something isn’t working and hasn’t been for a while. Man, I do not like that feeling.
Problems in a dealership’s financial structure rarely arrive with a trumpet blast or a neon sign. They show up quietly, like ants at a picnic, one or two at first, then suddenly they’re everywhere and someone’s panicking with a paper towel.
What begins as a minor oversight or a well-meaning shortcut can, over time, evolve into a full-blown emergency. It’s not so much that things go wrong all at once, but that they’re discovered all at once. And in that moment of discovery, the atmosphere changes. Someone uses the word “crisis,” and people start printing reports they haven’t looked at in months.
The most common outcomes tend to follow a familiar script.
The Vanishing Act
First, there’s the realization that a substantial amount of money appears to be missing or uncollected. No one uses the word “stolen,” but it hangs there in the silence like the smell of burned coffee. Then there is the inevitable cash flow problem, often disguised as a temporary blip until it becomes clear that the capital reserve has been slowly draining for reasons no one can quite explain.
When Schedules Stop Making Sense
Next come the schedules. These should, in theory, provide clarity. Instead, they read like a choose-your-own-adventure novel written in disappearing ink. There are balances no one remembers creating and receivables no one has tried to collect. When asked why this item is still open after eight months, someone shrugs and says, “We thought that customer might come back.”
The Forgotten Ritual of Reconciliation
Bank reconciliations are another favorite. These are supposed to be monthly rituals, quiet moments of order and alignment. In reality, they’ve been skipped. Not maliciously. Not even intentionally. Just skipped, the way people forget to floss or cancel a free trial. Somewhere, someone was going to get to it, but then someone else got sick or quit or retired, and the bank statements stacked up like unread mail.
The Ghost in the Payroll
Every now and then, there are ghost employees. These are people who appear on the payroll but not in the break room. They exist only in the ether, collecting wages like apparitions in a haunted accounting system. Sometimes they are relatives of employees who were added “just to help out for a few weeks” and then never removed. Sometimes they are one or more fake employees collecting a paycheck. Either way, the money leaves, and no one quite knows where it went.
Books That Tell Too Many Stories
And finally, there are the books. These should offer clarity and insight. Instead, they resemble something closer to an archaeological dig. Layers of entries, corrections, reclassifications, and placeholders make it nearly impossible to tell what’s current, what’s accurate, and what’s best left undisturbed. Add a DMS conversion to that mix and…oh the stories I could tell! An auditor once told me they felt like they were solving a puzzle where half the pieces had been eaten by the dog.
A Chance to Rebuild
What surprises people most is not that these things happened, but how long they went unnoticed. Like most things in life, they developed gradually. But once the lights come on, everything looks different.
The key is not to assign blame, but to understand the sequence. Because if you can follow the breadcrumbs, you can fix the foundation. And once that’s in place, you can stop worrying about ghosts, missing money, and the mystery line item called “To Be Resolved Later.”
Finding Your Way Forward
The good news (because there is always good news) is that clarity has a way of restoring momentum. Once the initial shock subsides and the reports are printed and the mystery balances are acknowledged, most dealerships find themselves not defeated, but motivated.
This is not the end of the road. It’s a recalibration. A chance to slow down just long enough to ask better questions, tighten what’s loose, and rebuild trust in the numbers that drive everything else.
The truth is, even the strongest stores benefit from a second look, a deeper dive, or a fresh set of eyes. Because when your financial house is in order, the rest of the business stands taller, breathes easier, and moves forward with purpose. And isn’t that what we all want in the end…not just a clean report, but a clear path ahead?
Get Automotive CFO-level insights without the full-time cost. We identify inefficiencies, fix cash flow issues, and unlock opportunities, all at no net cost to your dealership.