Reconcile a Budget by Area

The term "Budget" varies depending on the region. For our Asia-Pacific customers, it's often referred to "Budgeted Outgoings." European users will see it labelled as "Service Charge," while those in North America will find it listed as "Operating Expenses." The terminology used in the app adjusts based on your location. For additional clarity on regional vocabulary, please see our Glossary of Regional Terminology.

This article will guide you through the process of reconciling a Budget by Area. Reconciliation is an important step to ensure expenses are accurately recorded and allocated in accordance with your budget. Before starting, ensure all expenses are assigned under the Expense to Schedule tab. You'll also need to lock your budget, which can be done by referring to our supporting documentation. Let's walk through the necessary steps to effectively reconcile your budget.

Begin Reconciling Your Budget

To begin, navigate to the relevant Property and click the Property Charges tab. Click on Outgoings and select the relevant budget. If you are ready to begin reconciliation, you will need Lock your budget firstly to stop any further financial transactions being included whilst you are mid-reconciliation. For more information on this please refer to this article: Locking a Budget by Area.

Once you have locked your budget, the option to Reconcile will be available to select.

Step 1: Schedule Reconciliation

This step is essential if you have expense accounts covering multiple schedules of the budget. This will need to be completed before reconciling the budget. 

1. Check and mark all schedules as complete using the buttons at the top and bottom of the screen.
2. Toggle the view of the schedules between expanded and collapsed modes.
3. Completed schedules will turn blue and show a checkmark.
4. View the breakdown of invoiced expenses by clicking on the actual expenditure figure.
5. Edit actual expenditure figures for individual accounts by clicking the pencil icon beside them. Confirm changes with the tick or reject with the cross.
6. Examine area allocations by clicking on the allocation percentage figure.

Note that all schedules must be marked as complete to proceed.

Step 2: Allocate Income to Area

If you've had tenants occupying more than one area, this step is essential. Allocate tenant income to the respective areas using the following tools:

1. The Auto Populate feature can quickly pre-fill allocations for you.
2. Add tenant areas and allocate invoiced income or credit notes accordingly. Adjust Auto Populated data if necessary.
3. Confirm that all income is allocated and mark each tenant as Complete when done.

Step 3: Reconcile Areas

This step analyzes the allocation of expenses to different areas and the tenants responsible for them.

1. Verify and complete the area checks. Mark all areas as completed when done.
2. Examine the area expenditure breakdown by clicking on its figure.
3. Review the adjusted expenditure per tenancy, calculated based on occupancy periods, by clicking the respective figure.
4. Inspect the undertaken invoiced amount per tenancy, again by clicking on the figure.
5. Edit the Invoice/Credit amount if necessary and save changes with the tick or cancel with the cross.
6. Once each tenancy has been reviewed, mark as complete, and it will turn green with a checkmark.

Step 4: Client/Owner Contribution

Determine the client or owner's contribution towards the budget, factoring in any allocation shortfalls caused by concessions, vacant areas, or non-full allocation percentages.

1. Assess the total budget expenditure and its allocation across schedules.
2. Review non-recoverable amounts and shortfalls by clicking on the amount and examining the pop-up details.
3. If needed, adjust the total owner contribution amount and then complete the step.

Step 5: Summary

A summary screen will present an overview of the reconciliation as well as indicate the total balance charges needed for the upcoming tenant charges. Be aware that beyond this point, returning to previous steps is not possible.

Step 6: Generate Balancing Charges

In the final step, generate the balancing invoices and credit notes for tenants and the owner.

1. Set the default account code for all invoices and credit notes.
2. Automatically determine and set the default tax type.
3. Choose the PDF template for generating documents.
4. Select which invoices or credit notes to generate and then confirm to start the process.
5. Edit details for individual documents if necessary.
6. Finalize the budget when all documents have been generated. After finalization, you will no longer be able to generate new documents.