An Effective Self Storage Facility Audit. Bob Copper Self Storage 101
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1 An Effective Self Storage Facility Audit Bob Copper Self Storage 101
2 Most Common Mistakes Hands off management Not paying attention to the details Not understanding management reports Not adjusting to the new marketplace No Revenue management Hiring the wrong kind of manager for the needs of the store
3 Why Audit? To Learn the properties you own or supervise Discover possible theft Determine compliance with policy and procedure Determine compliance with the law
4 Create an atmosphere of deterrence Prevent losses from lawsuits Improve the Operations and Profitability of Your Facility
5 Like gambling? Ask yourself: How often do I audit my facility? When is the last time my facility was audited? I don t believe in the use of auditing my facility.
6 Every audit should include: Balancing the petty cash and drawer Perform a complete unit inventory walk through Review bank deposits and credit card batch reports Review discounts and waived fees
7 Review alterations log/reversed transactions Review rate variations report Review tenant files
8 Review vacate files Review of past due accounts Check for hand-written receipt books Count sales merchandise
9 Checking the computer for unauthorized forms, receipt templates, etc. Visually inspecting the facility Other items might include checking the on-site rental truck or inspecting the onsite apartment.
10 First things first Must know the cash drawer amount Review petty cash totals and receipts Should be counted immediately upon arrival. Print daily deposit report Check for appropriateness of expenditures Review previous day s deposit
11 Conducting a Space Audit In creation of the self-storage asset, where s most of the value arise from? Your inventory, and keeping it 100% correct, directly affects income. Easy to make mistakes and if not caught quickly can become huge liabilities. If units are not rented or vacant and rent-ready, you really need to know why.
12 Checking the Property While Conducting the Space Audit Landscaping Neat, well-kept, colorful Keypad Working, good condition Gate Clean, good working order Gutters No dents and dings
13 Good working order, bright Driveway No puddling water, large bad patches Doors Clean, dent and ding-free Hallways Swept, metal panels and floors in good condition Lights
14 Asphalt Good condition Trash Picked up Dumpster area Clean, debris-free, in an enclosure Elevators Clean and in good working order
15 Fire extinguishers Easy to access, up-to-date on inspections Restrooms Clean and well-stocked Office cleanliness and organization No clutter, no sticky notes
16 The Company Provided Apartment Why it should be checked? How often? Company Policy on doing inspections?
17 Rental Trucks Cleanliness Truck leases all accounted for Mileage tracking from lease to lease Fuel levels accounted for
18 Prepare for the Space Audit Print walk-through, tenant status or rent roll report Need key for vacant spaces lock Clipboard
19 Report should show status of every unit Rented Units Should have tenant lock May have company lock AND seal? No seal?
20 Vacant Units Should have vacant space lock Clean and rent-ready Past due Units Over-lock Lock cut, sealed
21 Units not listed on inventory: Conversions? Converted units: Do both doors have tenant locks? Manager units?
22 Occupied units found vacant: Has customer moved in yet? When did customer move-out? Is manager holding vacates?
23 Vacant units found occupied: Auction unit? Mystery unit? Transfer in progress? Vacate, tenant forgot to remove lock? Units should not be vacated until lock removed
24 Reserved units How long? Company policy? Damaged/Unrentable units How long? Status of repair? Repaired, never removed from list?
25 Company-designated units Cart room Supplies Manager-use How many? Company policy? Clean Organized Make notes about units, cleanliness of driveways and hallways, lights not working, trash in units
26 Follow the Money Review Bank Deposits and Credit Card Batches Your software should create daily deposit report: Cash & Checks Credit cards Match cash and check totals with bank deposit slip stamped by bank Cash on daily deposit report must match cash on deposit slip
27 Individual checks should be listed on computer report and matched to bank deposit slip. Bank deposit slip should be attached to matching computer deposit report.
28 Credit card totals must equal batch report Watch for credits issued to credit cards! Well-documented? Approval? Managers can submit credits to their own personal cards.
29 Where s the money going? Review discounts and waived fees: For any discounts, must be documentation in account notes. Promotional Approved by company Verify sample with tenants Customer Service calls Confirm special given Managers can collect full price, use promotion to input into computer, pocket the difference
30 Customer Service: Well-documented Issue resolved Verify sample with tenants Managers can collect rent, indicate customer service discount and pocket the difference
31 Waived Fees: Company policy Account history Confirm sample by contacting tenants
32 Review Alterations Logs/Reversed Transactions Rent rates changed Competitor match? Friend/family discount? Move-in reversed? Supply of manager units? Non-standard rents Below standard amounts Street rate changes? Competitive challenges? Poor sales skills?
33 The ONLY Legal Relationship Checking the leases: Review random sample Pre-paid Delinquent Older accounts Newer accounts Non-standard rents Large number of multiple units
34 Confirm lease is filled out properly and completely Lease is signed by one tenant and the manager More than ONE tenant listed? Does signature match name on lease? Commercial tenant? Person signing has documented relationship to business? Accounts receivable contact person?
35 Checking Addresses Address of Record matches address on computer ledger Change of address form? Changed without proper documentation? Lease commencement date matches date entered into computer?
36 Any promotional discount well-documented in lease file? Copy of tenant s ID in file? Tenant information sheet in file Completely filled out? Information matches computer ledger? Review tenant correspondence in files Late letters Rent increase letters Lien/auction documentation
37 Review Vacate Files Lease and other documentation in file Closing ledger Review uncollected rent total Large amount may indicate unit not vacated on timely basis Manager s can collect final rent, not post to computer Move-out deal? Customer-service calls to any suspicious vacates
38 Review Delinquent Accounts Are overdue tenants overlocked? Is gate access suspended? Are collections calls being made? Are broken commitments being IMMEDIATLEY followed-up on? Has the proper lien process been started?
39 Check for hand-written receipt book Company policy? Are they distributed? Are they allowed? Procedures?
40 Moving and Packing Supplies Use sampling Choose 5-6 items Confirm amount against computer reports Recount all merchandise if discrepancies
41 Questions?
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