- Magen Smith
4 signs you have the RIGHT self storage accountant
1. They understand your software
Too often, owners hire their local CPA or bookkeeper to handle their self storage accounting, but that professional doesn’t understand self storage software. Hiring a self storage accountant that knows how to read your reports and correctly classify your revenue will help you understand your numbers and run your business better.
Self storage accounting should break your income into appropriate buckets. Being able to review revenue collected and understanding what part is rent, late fees, admin fees, tenant insurance, other fees, etc. is crucial in running your operations. Total revenue can increase, but if you don’t know WHY, it doesn’t help you very much.
The right self storage CPA will understand your reports, correctly classify your income, and guide you in making the best decisions for your company.
2. Properly record sales tax
Some states charge sales tax on storage rent or parking spaces. Most states charge sales tax on retail items sold: locks, boxes, etc. If your accountant is recording revenue from bank deposits, they are including sales tax in income. Not only is this incorrect for self storage accounting, but it is also making revenue higher when you report it to the IRS. So you are paying income tax on money that isn’t technically yours!
The right self storage accountant will accurately record your income from your storage reports and code sales tax as a liability, not as revenue on your income statement.
3. Monthly Deposit Audit
Do you know if all your revenue made it to the bank? Part of my monthly close is to trace every dollar from the storage management software to the bank account. If your accountant is simply recording revenue from your bank statement, there is no assurance that the money you collected in your business made it to your bank account. I’ve found more theft from this simple lack in oversight when it comes to self storage accounting.
Performing a deposit audit as part of the month-end close process is a critical part of self storage accounting.
4. Review revenue opportunities
I’ve been in every aspect of the self storage industry: developer, management company, owner, and operator. I offer an accounting plus package that includes a monthly review of reports for additional revenue opportunities. It includes competitive shopping, revenue management, recommendations on auctioning units, fee adjustments, and more. The right self storage accountant should take the view of an owner. Why hire someone who can only perform bookkeeping and reconciling when you can have the additional benefit of experience and insight from someone who walks the talk.