Does the word “audit” send shivers down your spine?
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—that is, tax audits performed by the IRS—is enough to make the strongest-willed of us cringe a little bit.
That’s not all there is to audits, though! Audits can be performed on your own business to keep your team in check and make sure you’re not losing money.
The classic definition of an audit that most of us probably think about 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 and keep from tripping over different aspects of a self storage business audit, we’ll break it down into two main categories:
Both of these are important, and both 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.
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.
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.
Can you guess what a physical audit is?
That’s right. It 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, now!
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: damages that need fixing, climate control systems that need maintenance, landscaping that needs to be done, and more.
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 are staying honest.
Now, we don’t mean to say that they’re likely to be lying to you. 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) these errors!
And that’s your introduction to self storage audits! Hopefully, your hackles don’t rise quite as high when hearing the word “audit,” now, and you can move forward with getting the most out of your self storage business!
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