3 smart ways that your employees can steal from self-storage businesses, and 2 stupid ways

Is your storage business at risk for theft? Any business that handles cash or inventory is. Actually, let me restate that. ANY business is at risk of theft. If your business is self-storage, though, there are a few common ways for your employees to shave a little off the top for themselves without you ever noticing.

As a CPA for self-storage businesses, I’ve seen more ways for employees to “cook the books” than you’d believe, but I’m here to help you avoid being an easy target for embezzlement. Here are some basic areas in which you are probably vulnerable and how you can place a few basic internal controls to regain assurance that your employees are staying honest with you:

1. Waived late fees

Sometimes there is a valid reason to waive late fees for tenants, but a great way to pocket money during the month is to waive the late fee in the system and take the cash....

Your self-storage facility is making money, your manager is nice and has been with you for years, your financial statements always look strong, so why do you need a self storage audit?

An operational audit is a deeper dive into your processes. In 100% of audits that I perform, I find ways to make the company run better.

Sometimes these are little tweaks, but sometimes they are massive overhauls. I once found an owner an extra $4,000/month!

Here are 5 reasons why your business needs a self storage audit:

• Reassurance that all your money is going into your bank account
• Confidence that all your units are being rented properly
• Knowledge that all your processes are being followed correctly
• To have your staff training assessed by a professional
• To see your facility and management with a fresh pair of eyes
• To empower your manager to be the best that she can be

Your self storage businesses may need an audit if

• You, the owner, have never performed an audit, yourself
• You always lets the...

To make sure your business is financially sound, you should have a random facility audit performed on a regular basis, ideally quarterly. Self Storage Audits should be performed by someone outside of daily management, either a professional consultant or an owner. Letting your manager audit her own work is the same as letting a student grade her own test. What are the chances she’d get less than an A+?

When I perform a self storage audit, here are the top 5 mistakes I find:

1. Overlocks performed incorrectly

Every facility should have a policy on when overlocks are placed on late units. This usually happens on the 6^th of the month. No matter what day you pick, late units should be overlocked on the same day of each month, and locks should be placed on all late units. When I perform a facility audit, I check that all late units are properly overlocked, to ensure late tenants can’t simply open their unit and move out of your facility without paying their rent. When I first...

“Audit” is a scary word. I am hesitant to even use it because it makes me feel like the IRS coming to get you. I promise, I’m not scary, but I am thorough. So what should you expect during a self storage audit?

I use audits as a tool to find the errors in your business and fix them.

The point of an audit is to make the manager’s job easier and to give the owner a sense of comfort that his multi-million dollar investment is being run properly.

An audit isn’t about beating managers over the head for little mistakes. It isn’t about telling managers how to do their job. It isn’t about coming into a business as the all-knowing diva and pouncing all over their hard work.

I was once a manager of a self storage business. I know how hard the job is, and I truly believe that most self storage employees are honest, hard-working people, who want to do a good job for their boss and make their tenants’ lives easier. It’s true that some people...

The audit process depends on what type of audit you choose. I offer two types of self storage audits:

1. Facility audit
2. Operational audit

Audits are best done when management doesn’t know ahead of time. I coordinate with the owner to pick the best day to perform an audit before going onsite, to the facility. Here is a quick summary of each type of audit. A detailed overview can be found here. Facility Audit When I perform a facility audit, I am looking for certain key things:

• I check daily deposits from your storage program to make sure all the money was deposited into your bank account.
• I look at each individual self storage unit to make sure every unit matches the self storage system. Here are a few things that I check for:
  • Every unit that should be rented has a lock
  • Every unit that should be vacant has a company lock
  • Every unit that should be overlocked has an overlock
  • Every unit that should not be overlocked only has a tenant lock
  • Every unit that is in auction has an...