Episode Timeline
Confidence
Auditing. This is not a concept that immediately comes across as sexy or intriguing to most people. So I should start this recording with something a bit more universally valued: Confidence. Welcome to part 2 of week 2, this is Simon with the Technorection podcast.
Seeing if that name sticks. We are still in week 2 and are on part 2 of the Problem analysis. So… Confidence. What is confidence?
To me when I think of confidence, I think of trust. Trust in yourself. One’s inner world. Trust also in the outer world, in things seen or unseen. It’s stepping into an elevator and pressing the button with the expectation that it will get you to your chosen floor, fault free.
It’s making a deposit into your bank and knowing without a doubt that you’ll be able to withdraw it in the future – should you need to. Confidence alone can win a heart… or even a battle. [A customer’s confidence in you is probably more valuable that their outright satisfaction with your services].
This virtue of confidence is the reason that I must talk about … auditing. Because confidence is not necessarily an unchanging binary state – where it’s either there or not. It can fluctuate, it is quantifiable, you can measure it and Auditing provides a mechanism to directly affect your customer’s confidence in you.
Raw Data
Companies that collect money on behalf of a client (in our case a parking lot owner) need to provide access to key data to a third party OR they need to provide the owner with direct access to this RAW data on their properties. This is a major process and part of our mission of managing parking facilities. It allows our clients to audit the financial reports we send them on their properties.
The reports contain things like how much revenue we collected, how this revenue is broken down and what the occupancy rate of the parking lot was – 100% occupancy is our equivalent of what manufactures would measure as total production capacity.
Imagine You’re the Boss
For a second, imagine with me that you are the owner of a profitable car park and you’ve hired us, Afropark, to manage it for you. In other words, you want us to collect your rentals – for both monthly parkers and hourly parkers and keep the place safe and clean.
Every month or week you may expect a deposit of your collected rent (less our fees – of course) and a report on how the money documented was collected. Perhaps with copies or links to the raw data used to compile it. This process of taking various bits of data from the parking sites and compiling it into reports is what WE call our Auditing process. It’s not Auditing in the financial sense. It’s basically checking that all those bits of data from the different systems synchronize with each other – And where they don’t this is noted in the report. I am the guy in the company who does this job, well with the help of our administrator.
How this auditing process works is relatively straightforward to describe, if I start to get boring, just hold on for a few more minutes:
Auditing Process
The auditing process – The supervisor goes to each site in her region to collect various pieces of data from 5 systems and processes – the daily cash documentation, the cash register report, the monthly tag system report and the vehicle counter report. These by the way are all lines of numbers printed or written on paper.
She then takes this to the office and dumps it on the admin desk Here, the administrator transcribes all this data from paper onto what we call the audit spreadsheet. This is monster 53 column excel spreadsheet with a column for each piece of data collected for each site. So each line is a different day.
She usually batches this task into 2 chunks per week because it is really time consuming doing this for several sites. Finally, I get this spreadsheet and filter it for the most relevant information that connects all the data together – the revenue and the vehicle numbers – I make it look pretty, put a logo and some explanations and send it through to the client as a PDF.
I will sometimes attach scans of the raw data – those documents that fed into the audit spreadsheet. Scanning documents is a pain – cash register reports are super long, skinny paper and even if all the documents were the correct size, by the time they arrive in the office from spending all week in a dusty basement – they look like they’ve been through a warzone – definitely not Covid-19 ready.
You may be asking whether this data that is processed into a financial report – can it be manipulated? For example, is it possible for me to underreport the revenue and alter the raw data to support this underreported value?
Of course it is… The integrity of the raw data affects the integrity of the report and leads me to my last point on auditing – Fraud.
Fraud
Any sort of misrepresentation is fraud. If I willingly report a site made R90 when it made R100, maybe thinking I can pocket the difference – that is fraud. Fraud prevention is paramount. It assures owners that their revenue is correct and obviously directly impacts their confidence levels. Remember – confidence? That sense of trust that can go up or down.
How to prevent fraud
The best way to prevent fraud is to give the owner direct access to the data at the source, not just the data I send them that supports the financial report. The source in our case is our network of complicated systems in their dingy downtown parking basements. Not surprisingly, they almost never bother to access this data and audit the report. I guess this means they are confident in us?
But confidence as I mentioned before is not just a feeling. It needs to be backed up and enabled with solid data from solid, incorruptible systems that are easy enough for owners to perform audit themselves.
This I think builds a confidence that can last.
Next week, I’ll be covering the research and brainstorming of the solutions that came out of this week’s’ analysis of our main problems. Catch you then and – thank you for listening.