How do I assess a motorcycle shop’s used bike consignment records?

Start with the paper. Each bike on consignment should have a signed agreement showing the owner, the agreed price, the shop’s fee, how long the bike can stay and who pays for repairs. Gaps in the paperwork are a warning that the shop works on handshakes, and that will matter if an owner disagrees later.

Compare the agreements to the floor. Walk the showroom with the list and confirm every bike matches. Look for bikes that have sat for a long time, since owners get unhappy and the shop may have to deal with them. Ask what happens to unsold bikes, and who keeps the keys and the ownership documents.

Then trace the money. Pick a few sold bikes and follow the sale through to the payout. Ask where consignment money is held before it is paid, and whether it is kept apart from the shop’s own funds. Your accountant can tell you how it should appear in the books. Ask about complaints, and check open ones personally. Keep a copy of the consignment ledger as it stands on the day of closing, so every open bike and unpaid owner is agreed between both sides.

Key takeaways

• Match every bike on the floor to a signed agreement and a named owner.
• Trace a handful of sales through to the owner’s payout and the date it was paid.
• Ask where consignment money is held and whether any owners are still waiting.