Inventory Audit

Inventory audit in a dealership refers to the routine process of verifying that the physical vehicles on the lot match the records in the dealership's inventory system and financial accounts. This is important for both operational accuracy and requirements by lenders (floorplan audits) or manufacturers. Many dealers finance their inventory through a floor plan (a type of line of credit using the cars as collateral), and the lending bank will periodically send an auditor (or ask the dealer) to confirm each car they financed is actually on the lot and unsold. The dealership must account for each vehicle: by VIN, whether it's new, used, sold (but not delivered), or if it's out on a demo or loaner. For internal control, some dealers do a monthly lot walk where managers or accounting staff scan all VINs to make sure no discrepancies (like a car missing or a unit that got sold but not reported properly). In Canada, where many dealerships have multiple lots or storage yards due to space constraints, keeping track of inventory locations is part of the audit. A thorough inventory audit will catch errors like a unit that was traded out but not taken off books, or a misfiled VIN. It also intersects with security: if a car were stolen, the audit would catch that it's gone. Some provinces (e.g., Ontario) might inspect dealer inventory records for proper documentation, but mostly it’s a financial and operational exercise. By conducting regular inventory audits, a dealership ensures its records are accurate, its floorplan liabilities are correct, and there are no surprises when a bank or OEM rep does their own audit. It's an important piece of dealership accountability, often handled by the accounting office with help from sales managers (who know where cars are).