11 Mar 2024
Do you know everything that goes on at your facility?
An operational audit can help you understand the risks and responsibilities of your business and find the right opportunities to improve.
Your facility should be performing operational audits about once a year. If you are a larger operator, you may need to conduct an operational audit more often than that.
An operational audit of your storage facility will help you set goals, reduce your risks, identify theft, and increase the all-around efficiency of your facility!
Why is an audit worth all of that energy?
The more you understand your facility, the less you’re wasting your time and resources on improvements that shouldn’t be taking priority.
An audit helps you get your priorities straight, so you can focus on improving what matters most to your tenants and most to your facility.
Get free checklists, templates, and forms with our Self Storage Operator Toolkit
Petty cash is for small day-to-day expenses; for example, office supplies or reimbursements to employees who purchase items for the business. There should be a petty cash log that includes all costs and uses of the cash.
Log your petty cash expenditures to ensure that money is only going to business expenditures.
It is also an excellent way to track expenses. A petty cash log also offers information that can help with your storage facility's taxes!
An operational audit should also include the physical counting of merchandise, like boxes, tape, tie-downs, locks, and any other items for sale at the facility.
Keeping up with the status of your inventory will ensure that you're not holding too many items at the facility. You’ll also get a good handle on how much money is tied up in moving supplies, locks, etc.!
Keeping an accurate storage unit inventory count can require a physical walk-through of the whole facility and checking every unit to make sure each one is vacant and correctly marked.
The walk-through should make sure all rented units have locks on them. Open any unrented units, making sure they are clean and ready to be rented at the drop of a dime.
This inspection ensures that no items are in unrented units and that the units are clean, undamaged, and ready for the next tenant!
Also, correctly mark each unit in your facility’s management software system, such as SiteLink & StorEDGE.
To ensure there is accountability for your on-site manager, periodically audit their weekly walk-through reports.
Every tenant at your storage facility should have a file, whether that’s a hard copy or online. This file should include the original signed lease, a copy of a state-issued ID, any autopay permission forms, and signed insurance agreements.
All items in the tenant file should match the information in the facility’s management software system, including contact information. If the information in your PMS isn’t accurate, automated messages (like bills) won’t reach the tenant!
The data should also include copies of any late and lien notices sent to the tenant. This information is imperative if a unit must go to auction, and you don’t want to be caught unaware when it comes to auctioning someone’s belongings.
An operational audit should also include a look at your current “past-due” tenants.
Make sure that your managers are taking the appropriate steps based on your storage facility's policy to collect delinquent payments.
The auditor should check the notes in the facility management software system to make sure the managers are noting their collection call attempts and mailing delinquent notices appropriately.
Having a record of your outreach can be what saves you legally down the road!
An operational audit should also include the physical inspection of the office to make sure it is clean, organized, and that your merchandise is displayed well!
Any possible maintenance issues should be noted. Be sure that your office is presentable to tenants, and that it’s clean and comfortable.
Your website might be the first glimpse a potential tenant receives of your storage facility, but the office is harder to forget.
If you need to, also audit and visually inspect the manager's apartment for any maintenance issues.
Occasionally, some units aren’t rentable.
For example, a unit may be un-rentable because it is storing your own office equipment, cleaning supplies, or construction materials. Make sure that you note all of your units being used personally by the facility!
If there are any other units outside of that scope, the auditor needs to understand why those units are not ready for rent. Leave a paper trail of notes and you won’t be left wondering what you have available.
For example, if a unit is damaged and un-rentable, the auditor should verify the damage and see if the managers have requested the right repairs.
When you’re auditing your facility, make sure that the greenery and your curb appeal are also getting some attention. Remember, this is probably the first impression your future tenants will have seeing your facility!
What to look for when landscaping:
If your units are fitted with individual alarms, each and every one should be inspected.
Any units that do not have functional alarms should be noted and scheduled for repair.
Verify that the security system at your facility is functioning as it should. Make sure that all alarms are active and all of the cameras are rolling!
Keeping up with your inventory is essential, but so is keeping up with your people! An auditor should look at time clock records and make sure they match with the employees’ work schedules.
Any overtime should be checked and justified. An auditor should also make sure that the manager was present during all business hours.
Be sure that the fees your employees are waiving match your facility’s policy. Waiving a fee can be a great way to get some early loyalty from a tenant, but that doesn’t mean they should be handed out like candy!
If you keep a good record of fees waived, you can see who is taking advantage of your generosity and adjust accordingly.
When you’re auditing your discounts, make sure that all of the rates are matching with the paperwork, and keep detailed records of what discounts you give each tenant.
You should also check everywhere your discounts might appear - all your marketing material, signage, etc. - to make sure your listed rates are current. Limited-time offers have a way of lasting past their expiration date.
Inspect all rental trucks for cleanliness, correct licensing and registration, and maintenance. Regular maintenance can keep your vehicle running for a lot longer, and it can protect you from liability, too. If a tenant damaged the vehicle but you haven’t noticed, the next tenant to use it might end up hurt - and that’s a nightmare.
That moving truck is part of your business, part of your marketing, and part of your value proposition. Including it in your audit can ensure that value isn’t wasted.
Get free checklists, templates, and forms with our Self Storage Operator Toolkit
A good operational audit requires a visual inspection of the whole facility.
Include walls, gates, floors, tenant doors, cameras, lighting, and elevators to make sure all are in good working order and available for your tenants.
Make sure that your facility is clean and presentable; you want your tenants to feel safe storing with you, not stepping over sticky floors.
You chose your employees for a reason, and it’s good to trust them; in fact, you have to! Still, it’s good practice to check your cash deposits to make sure they align with all your records.
Cash can be misplaced, miscounted, counterfeited, and stolen - the more often you check your deposits, the sooner you can find these discrepancies and start solving the problem.
Customer reviews are critical when conducting an operational audit of your self storage facility.
By checking your customer reviews, you can monitor your facility's online presence.
Online reviews offer great feedback for upper management and can give them information to help their managers.
Customer reviews help you appear in online searches with major search engines like Google!
Operators should respond to every Google review, positive or negative. Positive ones are easy - thank them for their business. Responding to negative reviews is more difficult, but it can be done well, and it can help your business!
Always be sure that the price your tenant is paying is the price that their unit is listed as. Consistency in payment doesn’t necessarily mean that the payment is correct!
This will help catch customers who got missed during rate hikes, as well as other clerical errors that might be losing you money.
Performing an operational audit is no small task, but we hope this list makes it a little easier to keep track of what has to get done, and what’s a good idea anyway!
To read more about my favorite StoragePug features, take a look at:
This article was originally posted on the StoragePug Blog on February 21, 2024
Gardner Dorton is a content writer for StoragePug in Knoxville, TN. He attended The University of Tennessee for his undergraduate degree and The College of Charleston for his master's in creative writing. He's dedicated to giving smaller operators a fair chance against the huge players of the self storage industry. When he's not writing website content he can be found singing improv songs to his dog.
