A real estate business has a lot of paperwork; it might be monotonous, but it is extremely important to run the business smoothly. One of these crucial but tedious works is CAM reconciliation or Common Area Maintenance Reconciliation work. Though this is a part of the more extensive lease agreement, a CAM reconciliation alone can be an overwhelming task. When not followed to the T, you can be up for more significant legal and compliance battles.
CAM reconciliation in itself involves a lot of legal documents and complex language. But property management must go through them with a fine-tooth comb to never overcharge or undercharge tenants and lose money. How do you do it? Here are a few project management best practices for excellent CAM reconciliation work. Read the full blog to know where to start.
Why do you need flawless CAM Reconciliation?
An essential need of CAM reconciliation is the money property managers, and owners retrieve from CAM can be reused to maintain the property. Another primary reason is that most tenants feel they are not supposed to pay for the things they are made to pay for. With proper reconciliation practices, you can make your tenants understand why the money is essential and how it benefits them in the end.
7 ways to get better CAM Reconciliation?
CAM reconciliation is an extensive and strenuous task; here are a few of the best practices that can ease the job for you.
1. Begin with a detailed expense review
This is the first step to getting a spotless CAM reconciliation report for your real estate business. Make sure all expenses and spending are accounted for. Every penny counts, and you need to have proper documents before you present it to the tenants. Never give your tenants a chance to question your integrity due to gross human errors in reviewing expenses. This must include month-to-month expenditure and vendor invoices. You can also go the extra mile and compare your CAM reconciliation with last year’s to get a better internal review.
2. Never negotiate on your standard maintenance fees
When you send out a lease and sign a contract with tenants, new or old, you must ensure that there are no discrepancies in maintenance fees. Be it 3-4%, make sure that your tenants understand that the money is for their benefit at the end of the day. Due to unprecedented events, you choose to waive off the fees for some tenants; you might open up flood gates for other tenants to ask for such favors constantly.
3. Be updated about special requirements
As a property manager, you must know that CAM reconciliation in real estate is not the same for all kinds of tenants. Restaurants, stores and office spaces all have special CAM reconciliation rules and regulations. If you are not updated about them, it is a major fault in your system.
4. Keep your documents audit-ready at all times
From getting third-party documents to keeping track of invoices, keeping your documents lease audit-ready has many different tasks. If you need reports from your insurance providers or need invoices from vendors, do not forget to ask for them and get them documented before you finish your CAM reconciliation.
Lease auditors cross-check with lease agreement data with actual charges made in CAM reconciliation to keep work on track. This is a very detailed process, and you can land in a lot of legal trouble if not.
5. Consider outsourcing your CAM Reconciliation work
Back office outsourcing services are becoming increasingly prevalent to help companies save costs and labor. Without adequate expert staff, you can lose out on money and land in trouble. CAM reconciliations are filled with legal jargon and complex clauses, and it is best to get the work outsourced. Outsourcing the work will get you the best resources, and you pay for them when you need them. You do not have to pay for these expert staff full-time. They will help obtain comprehensible data that you can work with and streamline your workflow for better management.
This is why more than 78% of businesses across all domains are outsourcing their tedious office work for better efficiency. The KriyaGo CAM reconciliation services provide your real estate business with professional resources and boost profitability. Our team also helps you solve all irregularities in your documents and save you additional money on audit issues.
6. Put careful thought into checking accuracy
Run your internal due diligence and ensure that all CAM charges are calculated and filed as per gross leasable area occupied. Before you present your reconciliation to your tenants, you must ensure that all charges are accurate. You need to calculate gross-ups and expense caps, account for capital investments, and confirm the tenant stay term. You must also keep track of tenant turnovers and move-out timelines to allocate charges accordingly.
7. General ledger review
Though this might be one of the most boring and time-consuming tasks, it is one of the most essential too. As a property manager, you must ensure that all bills are sent to the correct buildings and units. Handling multiple real estate properties under one portfolio might make mix-ups real easy, but you can not keep any window. You must review and recheck the general ledger multiple times to ensure that every account is filed to the right property and reconciled on time. If you do this with proper care, you can even file escalation charges when things are not paid on time.
Summing Up
Proper technology selection in project management can be challenging. That is why at KriyaGo, we let you leverage the best of technology in real estate property management and back office work to get the job done. Your CAM reconciliation work will no longer be a significant monetary affair and an extra burden on your shoulders. We will do the heavy lifting of back office tasks while you focus on growth.
If you want to simplify and streamline your CAM reconciliation process, get in touch with the KriyaGo consultants. Talk to us in detail to know more.
