Can you accurately verify revenues based on water consumption?

[bobryen]

I am looking for a good way to cross-verify the revenue numbers of a 3 SS & 1 automatic bay wash by looking at water consumption. Hopefully, you can follow my logic. This wash used an annual average of 42,000 gallons of water per month last year. I?ve used industry data of 15 gallons per SS wash, and 50 gallons per IBA wash (brushless-no reclaim) for my calculation.

The SS wash generates $2.00 revenue / 15 gallons or .133 revenue per gallon.
The IBA generates $7.00 revenue / 50 gallons or .140 revenue per gallon.
To be conservative and to simplify, I?ll round both down to $ .13 revenue per gallon.
42,000 gallons * $ .13 revenue per month / gallon = $ 5,460.00 revenue per month.

This is a sanity check for myself ! Does it make sense ?

 

[robert roman]

In developing models to do this, I have found that industry averages can produce misleading results.

I believe a more accurate "estimator" can be developed with a build-up approach. This means using bucket filling and meter reading techniques to determine consumption rates by function. You should also account for any non-income producing uses such as landscape watering, weep system, free or re-washes, general clean-up/wash-down, toilet flushing, etc.

 

[bobryen]

I'll take this good advice and a bucket.
Thanx!

 

[JustClean]

...also replacement of old nozzles, any adjustments, rainwater collection, re-using R/O waste, water leakages, etc.

You are not from the tax office, are you?

 

[mac]

I know you may find this hard to believe, but there are dishonest people out there. An easy way to skew the water sonsumption figure is simply let some water run inside the equipment room. The operator shows high water usage, suggests that revenue is higher than tax records show, spends about $2-300 per month for more water, and gets an extra 100K or so on the sale. Why not ask the city for the last three years water records? Most will give anyone the info, and compare usage per month. Then do the bucket thing.

 

[robert roman]

My model(s) and methods include more than what was described above.

Yes, it is essential to obtain utility records which can be done under the Freedom of Information Act. However, there is often a lack of consistency of data. For example, some municipalities may retain 2-years worth of data while others may retain only 6 or 9-months because they don't have a computer system.

Consequently, it is equally important to do other things when attempting to reconstruct income such as analyzing traffic flow and car counts along with other activities.

You also have to employ a certain amount of common sense in this matter. For example, a liar may run excess water in an attempt to fake revenue. However, there are things that can be done to help uncover the lie such as examining weather data along with other things.