During my own professional journey, I worked in a high-end automotive group based in the New York market. Originally, when I took over, the group had an advertising agency responsible for all oversight of marketing accounting in conjunction with the CFO and corporate controller. Over time, the owner decided to phase out the agency and have my team and I do all marketing in-house, including working directly with accounting on all marketing responsibilities from the previous agency.
My responsibilities varied day-to-day as VP of Marketing, but I worked closely with the entire accounting department on annual and monthly marketing budgets. Reviewing parts statements, contract negotiations, vendor billing management, marketing accruals, co-op submissions, co-op management, and marketing accounting oversight, I had to sign each marketing, advertising or third-party invoice before it reaches the check signer for all locations.
According to dealers, this area is sometimes poorly defined or considered a priority. Having a buttoned-down, completely transparent marketing strategy, where all internal teams are in sync, isn’t always part of the story. Especially when making decisions, not all accounting departments are involved in the marketing strategy.
Fast forward to 2021 when I met Kelly Edgar, whom I now know as Virtual Controller. We instantly clicked on the synergies we have as we both work within the accounting department of a dealership; we have very similar philosophies and mindsets on the subject of marketing accounting. I sat down to interview The Virtual Controller on best practices and all the tips she has for maximizing your store’s profitability.
M: What is the sustainable marketing accounting process that every dealership in the United States must have?
VC: For all my dealers, I produce an advertising expenditure report every month. This is always mapped to the budget and links to the financial statements, so the partner or managing director can easily see what they agreed to and where the final expense was incurred. This is a great tool to use month-to-month to order to see and understand your spend tracking. It’s also good for the CEO to benchmark against his other ad reports, because he has access to reports that we don’t see from a traditional accounting perspective.
An example would be the ability to compare their ad spend on Facebook to the number of impressions generated: this is also useful in terms of GM’s ability to monitor and understand if there are spends that can be reduced, those that cannot. convert into traffic for the store.
These reports are important to produce, even if they are not requested, because there will come a time when the general manager will have to make a shared decision and he can easily refer to these reports, thus building trust within your accounting department. and your controller.
M: Why is it important to review the advertising budget every month? What are some best practices and tips you can suggest to a new CEO or owner?
VC: From an accounting point of view, their controller must be in constant contact with the GM/O/MP regarding any advertising element that is out of the ordinary. I know, for me, most of the time I don’t get the budget until the end of the month. It’s just because the GM certainly doesn’t have to get my permission on his advertising spend, but at the same time, I’m responsible and have to let him know when I see something that seems too high or too low. It’s also something that I think comes with time and knowledge of your GM. It often happens that I advise my general manager on elements that are out of the ordinary and that do not receive a response. Anyway, my GM likes to know that I’m watching these things, that’s why I’m here. Another reason budget monitoring is important is that the CEO can monitor trends, both good and bad. I always give my general manager a report on the origin of the actual expenses; this is how they can compare the impressions they get on Google Analytics against what they spend there.
M: Why should a dealership have an accounting department (virtual or in-house) handling marketing accounting vs an agency?
VC: You know, I’ve worked at dealerships where we had an in-house marketing professional, as well as a dealership that used an ad agency. I really see the benefit of both. In my opinion, the consideration really comes down to who has the most/best connections. You may be dealing with an advertising agency that has a large reach, for example, having used the same radio station for a long time and can get you the best spots at a discount. And you can find that local professional who also has longstanding relationships with different outlets who can offer you the same value. Either way, you’re paying for their experience, which can get expensive. Ultimately, what you want is exposure for your store. I strongly believe in empowering your staff to do what they thrive on. And for me, aside from watching the expense side, advertising should be left to a pro. It’s way too much commitment and expense to trust someone with no skin in the game.