Let me ask you something. When was the last time you sat down with your financials, not to pay bills, not to check your bank balance, but to actually review how your business performed last month against how you expected it to perform?
If you are like most RV park owners the honest answer is either not recently or not ever in any structured way. You know roughly what came in. You know roughly what went out. You have a general sense of whether it was a good month or a slow one. But you do not have a formal monthly review process and you definitely do not have a document that shows you exactly where you are relative to your original projections.
That gap is costing you. Not just in missed opportunities to catch problems early, but in the compounding cost of making operating decisions without accurate, current financial information.
Here is the monthly financial review every RV park owner should be doing, what it covers, how long it takes, and why it is the single highest return use of one hour of your time every month.
Why Monthly and Not Quarterly
A lot of small business owners review their financials quarterly because that is what their accountant asks for. Quarterly is better than never but it is not enough for a seasonal hospitality business.
In an RV park a single month can represent 20 to 30 percent of your annual revenue. A problem that surfaces in month one of peak season and is not caught until a quarterly review has already cost you two months of peak season performance before you even know it exists. By the time you identify it and course correct you may have lost half your peak season.
Monthly review catches problems while they are still small. It also catches opportunities while they are still actionable. That is the whole point.
Set a Standing Date and Keep It
Pick one day every month and commit to it. The 10th works well for most operators because it gives you enough time after month end for your books to be closed and reconciled. Put it on your calendar as a recurring appointment and treat it like a meeting you cannot cancel.
The review does not work if it only happens when you get around to it. It works because it happens every single month without fail, good months and slow months alike.
What the Review Covers
The monthly financial review has five components and in a well-run operation with clean books it takes 30 to 60 minutes start to finish.
Revenue by stream versus prior month and prior year
Start with the top line. What did the park generate in total revenue last month? How does that compare to the same month last year? How does it compare to your pro forma projection for that month?
Then break it down by revenue stream. How did transient nightly revenue perform? Long-term tenant revenue? Cabin or glamping revenue if applicable? Utility recovery? Store and ancillary income?
Every revenue stream has its own story. Transient nightly revenue down 12 percent from last year might mean a pricing issue, a marketing issue, a competitive issue, or a weather issue. You cannot know which one it is until you look at the individual line and ask the question. A blended revenue number tells you something happened but not what.
Expenses versus budget and prior year
Go through every expense category and compare it to your budget and to the same month last year. You are looking for two things: line items running significantly above budget and line items running suspiciously below budget.
Above budget items need an explanation. Was it a one-time repair? A vendor price increase? A staffing overtime situation? Understanding why an expense is elevated tells you whether it is a problem to address or a normal variation to absorb.
Below budget items need just as much attention. A maintenance line running 40 percent below budget in the middle of peak season almost always means maintenance is being deferred, not that the park suddenly got cheaper to maintain. Deferred maintenance is a future capital expense hiding in a current period variance.
NOI versus pro forma
After revenue and expenses, calculate your actual NOI for the month and compare it to what you projected in your original underwriting. This is the number that tells you whether the park is performing to the thesis you bought it on.
If your actual NOI is consistently running below your pro forma projection you have a fundamental performance gap that needs to be understood and addressed. Is it a revenue problem? An expense problem? A mix problem? The monthly review is where you identify which one it is early enough to do something about it.
Cash position and 30/60/90 day forecast
After you have reviewed the income statement, look at your cash position. What is your current operating account balance? What is your capital reserve balance? What is your tax reserve balance?
Then project forward 90 days. Based on your expected revenue and known upcoming expenses, what will your cash position look like at the end of month one, month two, and month three? Are there any months where cash gets tight? Any large expenses coming up that need to be planned for?
This forward-looking piece is what separates a financial review from a financial autopsy. The autopsy tells you what happened. The forecast tells you what is coming so you can prepare for it rather than react to it.
Key operating metrics
Finish with your operating metrics. Occupancy rate for the month compared to prior year and pro forma. Average daily rate (ADR) compared to prior year and pro forma. Revenue per available site night. These three numbers together tell you more about the operational health of your park than any single line on the income statement.
If occupancy is up but ADR is down you have a pricing opportunity. If ADR is up but occupancy is down you have a marketing or demand issue. If both are up but NOI is flat you have an expense problem. The metrics point you toward the question worth asking.
What to Do With What You Find
The monthly review is not just a reporting exercise. Every variance has a story and your job is to understand the story well enough to make a decision.
Ahead of projection on revenue? Great. What drove it and can you replicate it next month? Behind on occupancy? Why, and what specific action are you taking to address it? Maintenance running above budget for the third month in a row? That is a pattern worth investigating before it becomes a capital surprise.
Document your findings every month in a simple running log. What was the result, what was the variance, what is the explanation, and what if anything are you doing about it. That log becomes one of your most valuable operational documents over time. It shows you patterns, it informs your planning, and if you ever sell the park it demonstrates to buyers that the asset was actively managed by an owner who knew their numbers.
The 30 to 60 Minute Investment
If your books are clean, your chart of accounts is set up properly for an RV park, and your pro forma tracking document is current, this entire review takes 30 to 60 minutes. One hour a month on a multi-million dollar investment is not a burden. It is the minimum responsible stewardship of an asset that size.
If the review consistently takes longer than that, the problem is usually the books. A chart of accounts that is not structured for RV park operations forces you to do manual translation every time you review your financials. A bookkeeper who is not familiar with outdoor hospitality produces reports that require interpretation rather than analysis. Both are fixable problems and fixing them pays dividends every single month going forward.
If you want help setting up the monthly review process for your park, or want a fractional CFO to run it with you every month so you always have a clear picture of where you stand, reach out at pvifinancial.com. That is exactly what I do.
And if you have not grabbed a copy of my book yet, ๐๐ฟ๐ผ๐บ ๐ข๐ณ๐ณ๐ฒ๐ฟ ๐๐ผ ๐ข๐ฝ๐ฒ๐ฟ๐ฎ๐๐ถ๐ผ๐ป: ๐ง๐ต๐ฒ ๐๐ผ๐บ๐ฝ๐น๐ฒ๐๐ฒ ๐ฅ๐ฉ ๐ฃ๐ฎ๐ฟ๐ธ ๐๐ป๐๐ฒ๐๐๐ผ๐ฟ’๐ ๐๐๐ถ๐ฑ๐ฒ ($49), it covers the full financial management framework including everything you need to run your park with the discipline it deserves.
You can get it direct here: wendipvifinancial.gumroad.com/l/kqmyb, or Amazon has it too, just search author Wendi Rook.
You might want to read this next: “Your bank balance is lying to you”
Leave a Reply