Real Estate Portfolio Management / Cost Chargeback & Invoicing

Cost Chargeback & Invoicing: Application Overview

Once you enter your real property and lease costs using the Cost Wizard, you may want to roll them up to the appropriate parties for reporting, budgeting, or billing, or proportionately distribute these costs among the appropriate parties according to the amount of area they occupy; this process is known as chargeback.

For example, if you add a fitness room to your property, you may want to charge the property's tenants for the cost of this enhancement, with the tenant occupying the most space on the property paying the highest percentage of this cost.

Or, if you track costs for your buildings, but budget at the property level, you might want to roll up your building costs to properties.

With the Cost Chargeback & Invoicing application, you can proportionately distribute any property and lease cost among properties, leases, buildings, accounts, or departments. You can roll up lease costs to buildings or properties, or building costs to properties.

Prerequisites

Prior to calculating your chargeback costs, you must develop data for your leases, buildings, properties, or accounts, and, depending on the type of chargeback you want to perform, you might need to develop measured areas, or record the Area Negotiated Rentable for your leases. See the Nine Chargeback and Proration Scenarios for the area fields used by each cost category.

The following summarizes by role the prerequisite tasks for generating chargeback.

The Business Process Owner

1. Develops your real estate portfolio background data using the Background Data process, so that Lease Administrators can select this data when recording your leases, buildings, or properties.
2. Next, the Business Process Owner develops cost categories. Cost categories define the roll-up and proration that the system performs when costs having this cost category are charged back. See The Nine Chargeback and Proration Definitions.
3. If you are tracking your costs with accounts, the Business Process Owner develops them using the Define Accounts task.

The Lease Administrator

Enters data for your leases, properties, and buildings, using the Add/Edit task of the Lease Administration or Portfolio Management applications. 

Note:  If you are generating chargeback costs that prorate property or building costs to leases, you must enter a value for the Area - Neg. Rentable field for each lease, since it is the relative size of these areas that the program uses as the basis for prorating costs to leases.

The Cost Administrator:

• Approves costs using the Cost Wizard. Before you can charge back costs, your costs must be approved costs, which are Actual Costs that you have verified.

The CAD specialist develops suite, group, or room measured areas if you intend to charge back lease costs to departments, or property costs to buildings.

• If you intend to generate internal chargeback to your departments, you must first develop room or group measured areas in CAD drawings. Measured areas are area figures that reflect the true dimensions of your leased areas. See Associating Rooms and Leases or Associating Groups and Leases.
• If you are prorating property costs to buildings, you can develop suite, groups, or rooms in CAD drawings. If you choose suites, you develop suite areas using the Develop Suite Inventory process. For more information on developing suite areas, search Archibus Help for the topic "Develop Suite Areas."

Note: If you want to charge back lease costs to departments, you cannot use a suite inventory. To chargeback to departments, you must develop groups or rooms.

Typical workflow

The process of charging back costs and managing invoices involves the following steps.

Step 1. The business process owner defines the background data for chargeback.

• Define cost categories that group and summarize costs and define the roll-up and proration that are done when costs having this cost category are charged back. See About Cost Categories and The Nine Chargeback and Proration Definitions.
• Optionally, define any lease chargeback agreements that document any contractual agreement for specific lease costs. See Defining Lease Chargeback Agreements.
• Select your lease area method. Lease areas are calculated from suites, groups, or rooms, depending on your selection. This step is necessary if you are using cost categories that prorate lease costs to departments or property costs to buildings. See Select Lease Area Methods.

Step 2. The cost administrator approves the costs that are to be charged back.

You can charge back only costs that are approved.

See Approving Scheduled Costs.

Step 3. The chargeback administrator generates chargeback costs using the Chargeback Cost Wizard.

This action automatically runs the proration, lease area, and property area calculations on your approved costs, and creates Scheduled Costs for the charge back. These Scheduled Costs are tentative costs that you are able to review. See Generate Chargeback.

Step 4. The chargeback administrator views the list of chargeback exceptions.

See View Chargeback Exceptions.

Step 5. The chargeback administrator approves the Scheduled chargeback costs.

If these costs are receivables, you can now issue invoices for them.

See Approve Chargeback Costs.

Step 6. The chargeback administrator analyzes your chargeback costs by reviewing the approved chargeback costs.

See View Approved Chargeback Costs.

Optionally, the Invoice Administrator manages invoices by doing the following:

1. Assigns approved costs that are receivables to invoices.

2. Issues invoices once they are finalized.
3. Tracks Payments
4. Manages overpayments.

See Invoice Administrator.

See Also

Cost Overview.

The Nine Chargeback and Proration Definitions

Chargeback - Proration Calculations.

Chargeback Roll-Up Calculations.

Chargeback Proration Diagram 

Chargeback Roll-Up Diagram