Issue link: http://insights.grantthornton.ca/i/630120
Is your parking facility achieving its potential? How to get the most out of your parking lot operations Parking lots can be significant revenue generators for asset managers, thanks to their high margins. Yet, in many cases, they're a building feature that may be viewed as a low priority that can be costly in the long run. 2. Internal manager fraud—Employees with opportunity in an environment where controls are lacking can represent a significant area of risk, particularly if they begin to engage in misconduct such as lifting gates so customers can leave without paying. Aside from fraudulent activity, there are also many other, less obvious risks to consider. For instance, regardless of who is managing your parking operations, improper accounting practices, lot maintenance and poor customer experience can cost asset managers money down the road. Putting proper controls in place To protect your parking lot operations and ensure maximum revenue and performance, it's important to regularly evaluate the design and operating effectiveness of existing controls— most notably in areas of parking usage, transaction recording, billing and collection. After all, while well-managed parking lots can produce additional revenue seemingly effortlessly, ill-managed facilities are a different story. Whether your operations are outsourced to a third party or managed internally, without proper controls in place, you're exposing yourself to significant risks and bottom line leakage. Detecting fraud Risks from serious violations—such as stealing of cash, sideline businesses, under-reporting the fees collected or other fraudulent activities—are probably the most damaging consequences. Incomplete accounting records are also another challenge. These infractions can result in severe revenue slippage. The two most common categories of fraudulent activity are: 1. Customer fraud—If you're not directly overseeing your operations to ensure all ticket and payment machines and systems are in proper order, your business can be susceptible to such fraudulent acts as the passing back of parking tickets, lost ticket scams, or carpooling long term rentals.