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TPN' s Product Focus
The Power of Contract Audits: Ensuring Revenue Through Diligent Management

Leigh Thomas

September 2024

Contract parkers are a powerful and fundamental component of a parking operation. Contract parkers are the parkers who have a contracted agreement with a parking facility: a cardholder, pay per use member, or any number of creative contracts that work for the client and operator. Contract members depend on their space reservation and prompt customer service. Garage managers and owners rely on these predictable contracts to pay for their spaces. While transient spaces are usually more profitable, the monthly contract revenue is a steady foundation for the facility's income. Monthly cardholders often carry a physical card to enter and exit the facility (as we progress in the higher technology world, license plates or phone numbers will continue to replace the traditional card). Managing these cards, or a card number, is an essential component of garage management. At TPN, we annually review our client's parking operator's access management and complete a contract audit for each location, usually in March. In the audit, we confirm that each card number used in March also pays for a space. We often find a few (or yikes, many) card numbers that are active and used in the garage but have yet to be billed. Allowing customers to use active but unbilled card numbers could be a shocking loss of revenue for our clients.

In the Our Parking Industry Podcast aired May 30th, Clyde shared a Story from the Road about a garage that lost a quarter million dollars due to a mistake in the computer: the operators forgot to update the rates in the computer, and so undercharged every transient transaction for 11 months. This seemingly insignificant rate change, followed by a tiny oversight, caused a drastic loss for the garage owner and a shameful mistake for the operator. Managing the back end of the operation is imperative! TPN does many tests and check-ins with our locations to help with back-end management, and the Contract Audit is one of the most important. When the Contract Audit rolls out each year, we help our clients clean up their AR systems to house only active cards and troubleshoot any cards that are being used but not billed. While offering a contract program (monthly reservations and pay-as-you-go plans) is a tremendous asset to any parking facility, it requires diligence and an occasional overhaul to keep the data updated and tidy.

 

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