Banking on Parking Management Technology

September 2024

Banking on Parking Management Technology

by Ebby Zacharia and Christopher Perry

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This article was originally published in the September 2024 edition of Parking & Mobility Magazine. The original format of the article can be found here, https://issuu.com/theparkingprofessional/docs/p_m_2409_issuu/22

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The emergence of parking management technology has transformed parking management.

As management tools, parking management software platforms have become the key to managing parking assets. They can be integrated with PARCS to track transactions and combine with the transactional data provided by PARCS providers to offer comprehensive utilization data. Or, for owners and operators wishing to go gateless, it can be used to manage the entire parking session, recognizing vehicles when they enter the facility, associating them with the proper accounts or permits, and charging accordingly. 

Parking management platforms can also be used to manage multiple use cases. Until recently, it wasn’t possible to effectively and efficiently manage parking assets when there were a variety of different types of parkers in the same facility. With the emergence of parking management technology, however, owners and operators can now manage each user group differently, providing access to specific areas of a parking facility, offering access at different times, and even allowing them to charge different rates to different users. It can also differentiate between transient and permit parkers. This presents extraordinary financial and tenant amenity opportunities to parking developers, owners, and operators. 

But perhaps the most important features of a robust parking management platform revolve around finance and accounting. Cash accounting, accrual accounting, and parking taxes are all technical—but essential—decisions and processes.  As pointed out earlier, the software can differentiate between different types of users and charge accordingly, and then distribute parking revenues to the appropriate general ledger accounts. With parking management technology, accounting is now more accurate, faster, and easier than ever.

Parking Management Platforms: The Basics

Before we dig deeper into the accounting benefits of parking management technology, let’s first take a look at how the technology works. The heart of any parking management system is the software that runs it. The best platforms can be customized to allow owners and developers to address their unique parking management needs, as well as the unique needs of their tenants and customers. The software stores information about each user’s parking needs to build an individual use case for that user. The use case determines how the parking can be utilized, managing things like when and where the vehicle owner can park; whether they will be charged and, if so, how much; and whether the owner has access to a guest pass and, if so, how much they will be charged for each pass. 

There’s also a hardware component. Typically, license plate recognition (LPR) technology is integrated with the parking management platform to monitor entry and egress. The LPR cameras capture the license plate information of vehicles as they enter a facility, and they do the same when the vehicles exit. If the driver of the car prebooked a space, the platform associates the parking session with that reservation and bills the account accordingly. Drivers who haven’t prebooked will take a ticket at the gate and when they pay at the gate or at a kiosk, the system will associate that parking session with the payment. If the system is gateless, the driver usually will pay for the session on their personal device using a QR code or at a kiosk, and the platform will associate the session with that payment. Finally, if the vehicle has a permit, the system associates the stay with that permit. 

The technology does more than manage parking sessions or transactions, however. It also collects utilization data and can be set up to analyze and report that data in whatever manner best meets owners’ and operators’ needs. If the platform is integrated with a PARCS system, the data collected by both systems can be combined to provide a comprehensive look at who is parking in the facility, when, and where in the facility they are parking.

Finally, the best parking management platforms have a robust accounting capability and can record all parking transactions, manage multiple parking tax rules, post those records to the appropriate general ledger accounts, and provide accounting reports to both the owner/developer and the tenant. For some owners, the financial capabilities of the technology are the most important benefit. In fact, some owners think of it as an accounting platform that handles parking, rather than management technology that includes accounting. 

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Finance: A Deeper Dive

Parking has come a long way from the days (not that long ago) when parking fees were collected by hand and stored cigar boxes. Today’s modern technology-driven parking industry relies on automation to operate more efficiently and cost effectively. This is particularly true when it comes to revenues. In fact, this is where parking management platforms shine. 

Transactional reporting is the first step.  Integrating all data, regardless of the source, into a single platform creates the framework for accurate and compliant financial reporting.  After all, most transactional data (i.e. entry time, exit time, location, rate, etc.) looks the same.  Entry Time, Exit Time, Location, Rate, etc. Having all transactional data in one platform allows operators to make accounting decisions, such as Cash or Accrual methods, and apply them across their portfolio. This holds true for tax reporting as well. Unifying the transactional data, unifies reporting and, ultimately, compliance. 

But what about more complicated transactions? The best parking management platforms allow owners and operators to designate different use cases. So, for instance, an owner might offer discounted parking rates or even free parking to some tenants (using the discounts as a tenant obtention or retention strategy), while charging other tenants the standard rate. The platform can differentiate between each use case, collect the appropriate fees and automatically distributing the parking fees to the appropriate accounts. 

The accounting benefits also extend to managing visitor passes. Some owners allow business and residential tenants to offer guests visitor passes. Those passes may be tenant amenities designed to obtain or retain tenants, while in other cases they may be revenue producers, with tenants paying for the passes. The passes can be set up to provide parking at a designated time, and the platform will note the entrance and exit times. Once the visitor leaves, the appropriate fees are collected and distributed to the proper general ledger accounts. The best platforms can even manage multiple visitor sessions to accommodate larger groups or events.  These passes, paid or unpaid, all have associated value.  Without proper transactional records, the value of these passes is lost and compliant reporting and tax filing could be compromised. 

Finally, a robust parking management platform will allow owners and operators to standardize their accounting methods following generally accepted accounting practices. This includes managing owners and operators’ tax obligations on parking transactions. It’s important for platforms to be able to support various tax rates, filings, and jurisdictions. Being able to manage different tax jurisdictions is particularly important for owners with parking assets in multiple communities. For instance in New York, Manhattan and Brooklyn have different tax rates, so owners with parking assets in both boroughs need a platform that can manage tax obligations in both boroughs, as well as to the State of New York and to the IRS. 

Parking’s Software Era

After being dominated by hardware for the best half-century, the parking industry is now in its software era. Useful software packages and apps are constantly being introduced, and one of the most powerful and valuable is the parking management platform. The technology makes managing parking much more efficient and cost-effective, and it gives owners the power to automatically administer parking for multiple use cases and to customize parking management to meet the specific needs of their tenants. 

But perhaps most importantly, the technology provides powerful accounting benefits by collecting parking fees, taxes, and automatically distributing them to the appropriate general ledger accounts. The technology can also benefit the bottom lines of owners and developers because when you have this much control over parking assets it makes it easier to maximize parking revenues while maintaining fiscal reporting standards. 

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