Does a good coach put the playbook together but skip the game? Of course not! And even the most meticulous planners among us know that no gameplan survives contact–and your business plan is no different.
Today, let’s look at what we know and what we won’t know unless we look for it with…
Audits.
If that word sent shivers down your spine, you’re not alone. It’s not uncommon to get a sense of unease when you start hearing talk of audits. After all, the most commonly discussed form of an audit for the average American is a tax audit performed by the IRS—not fun.
But that’s not all there is to audits! We’re talking about audits you can perform on your own business to keep your plans working and make sure you’re not losing money. By taking a measured look at how you’re running things, you’ll reinforce the ways that work, and gain insight to the challenges you’re facing.
And by collecting valuable financial and operational data, you can uncover areas for growth and target improvement for next time. Let’s learn how to raise the bar by auditing our books and our facilities.
The classic definition of an audit is specifically an inspection of your financial accounts.
When it comes to your self storage business, though, there can be more to what an audit actually involves.
To keep things simple, we’ll break it down into three main categories:
All of these are important, and all three of them have an impact on your revenue and accounting. Just like great self storage time management, audits make your business more efficient.
Auditing your financial accounts and records is an important part of owning a self storage business.
Even if you aren’t currently looking to raise more capital or sell your facility, there may come a time in the future when you need money for an expansion or are ready to retire. For that reason, it’s important to keep good financial records for your self storage business.
Financial audits help keep your accounts in order and ensure two things:
A financial audit doesn’t need to be performed by a government agency, though. You can audit your own business, and you can even hire an independent auditor to do it for you. Most software will allow you to pull self storage reports with data on your finances.
Self-audits are practical from a financial perspective. After all, they let you save money.
But the advantages of an independent audit definitely surpass those of auditing yourself. Bringing in an outside auditor means that you get a clear, unbiased picture of your self storage business finances. It also helps ensure that you’re not missing anything or accidentally passing over any errors.
You may have looked at these numbers so many times that you’re likely to accidentally skim them, or you might not be looking for something that an independent auditor will.
Not to mention they’re the professionals. The chances are that you aren’t a trained accountant with experience in auditing financial accounts, so why not leave it to an expert to make sure it’s done right the first time?
Pug Pro Tip: It’s a great idea to use cloud-based accounting software such as QuickBooks if you’re going to hire independent auditors. This can enable them to view most of your records remotely and with little hassle. Bonus points if the software integrates with your self storage software.
A physical audit means physically checking that the state of your self storage facility—or facilities—matches what your records show.
There are many reasons why your records and physical property might be out of sync:
The list goes on. Really, you could probably come up with countless ways these discrepancies might occur!
Download the Operator Toolkit to get the templates and forms the pros use
Imagine these scenarios:
If you manage the self storage facility yourself, you may not have problems quite as often. But if you own multiple facilities or if you have managers that run the physical property for you, it’s always possible for there to be a disconnect between your records and your storage facility’s reality.
Even for operators that manage their own property, physical audits help keep track of actual unit occupancy.
As an added benefit, it’s a great opportunity to check your property for other things:
Beyond making sure your facility’s in good repair and its occupancy is accurate, there’s another kind of audit that, if overlooked, can cause problems to pile up. And without a clear source, it can seem like your facility is leaking money.
Which is why a service audit is so important. This type of audit examines your customer experience and sales process, with the intention of making sure your leads and existing renters are getting what they need when interacting with your business.
Knowing what’s right within your customer experience and sales process is a little more subjective than auditing your finances. Ultimately, what’s working gets you renters–but it also aligns with your goals and business philosophy. In our 2024 Auditing Pugtalk, Jason Christley of Argus put it this way: when you’re auditing your service, you’re asking the question, “is this serving our business goals, or is it a ‘nice to have?’” And throughout the entire process, remember that what you know now is more than you knew last year! This will help you keep an eye out for ways to improve your service.
You can accomplish this deep dive in a number of ways.
Examining these day-to-day processes can reveal points in need of improvement–and without examining them yourself, how would you know about them? A potential lead that found problems in your service won’t call you to tell you about it–they’re just not going to rent.
Let’s pull all of that information together and go over the benefits of self storage audits again in a more direct way.
Whether for yourself or for potential investors, lenders, or buyers, it’s important for there to be confidence in your self storage business’s financial records.
Self storage audits help create that confidence both by checking those records and by showing an active effort to keep them accurate.
Tax season is rarely fun. Having your business properly prepared makes it less of a chore, though! Auditing your records is a great first step towards this.
It’s entirely possible that you’re overspending or otherwise bleeding money somewhere in your operation. A good self storage audit can help find these areas while also making sure you’re not missing out on some financial opportunities.
In addition to making sure your records don’t have any holes or errors, it’s equally important to make sure that they match the reality at your self storage facility. Self storage audits that incorporate physical audits help you do this by checking on occupancy, repairs, and other things you spend money on around your facility.
If you don’t manage your self storage facility directly, an audit of your facility helps make sure that your managers aren’t in over their heads.
It’s likely you hired the right person for the job–a person with the right blend of skills to meet your customers’ needs. But your managers can make mistakes, too. Regardless of the reasons why, a proper physical audit of your self storage facility helps reduce (or catch) errors or inefficiencies that need attention!
Having multiple audits throughout the year has you constantly confronting areas that need to be addressed and checking in on your goals. According to Heather McCombs of Spacebox Storage, it means open communication between you and your manager, which improves trust and drives active growth. It’s not just about catching the mistakes, either. It helps you define, month by month, what your goal is and what you’re working toward. Rather than losing sight of your goal or chasing a goal that’s no longer right for you, you’ll be able to grow and adapt on a regular basis.
Auditing your finances, facility, and services give you insight into your business needs, turning your operations into an ongoing dialogue about your business goals and philosophy. Developing a plan for what to audit–and how often–is the next step. Don’t let the concept of an audit intimidate you; consider it another avenue toward growth. And with that growth, you can move forward with getting the most out of your self storage business!
Read more about optimizing your storage facility:
At StoragePug, we build self storage websites that make it easy for new customers to find you and easy for them to rent from you.
