Real Estate Portfolio Management / Cost Administration / Cost Administrator

Understanding Costs

The Cost Administration application enables you to internally manage costs associated with leases, buildings, properties, and accounts. You can work with Recurring Costs that enable you to quickly model and experiment with costs, generate Scheduled Costs so you have an individual occurrence of the cost, and approve Scheduled Costs so that they are Actual Costs that cannot be changed.

For example, you might start out by tracking your expenses and income with Recurring Costs so that you can generate a general picture of your cash flow. You may then decide that you want to track your expenses in more detail with individual Schedule Cost records. You can generate Scheduled Cost records from a Recurring Cost record, using the Cost Wizard , so that you do not need to enter data for each of the Scheduled Cost records. When the cost is definite, you can approve it so that it is a finalized cost that, if needed, can be used to generate chargeback. If the approved Actual Cost is a receivable, the Invoice Administrator can issue invoices for it.

Use the following table to help you decide which costs you want to work with.

Cost	Description	Benefits	Stored in this Table
Recurring	One record that summarizes a regular cost, such as a monthly rent payment. You can also summarize an estimated one-time expense. For example: a monthly rent cost (income) for $1000, beginning 1/2009 and ending 12/2009. You enter Recurring Costs using the Cost wizard.	Recurring Costs: Take the least data entry, as you enter one record, rather than records for specific occurrences of the bill; for example, one record that describes a monthly bill for a year, rather than 12 monthly records. Can act as a template used to generate individual Scheduled Costs records when you need them. Can be used to generate Cost reports, Cash Flow reports, and base rent reports.	Recurring Costs
Scheduled	An individual cost that is planned or budgeted, and can be changed at will. These costs provide the exact amount and date of each income and expense in its own record as an individual cost. For example, expected rent Amount - Income $1,025.00 that is payable on 1/1/2009. You can also have the system generate Scheduled Costs based on Recurring Costs from the Schedule tab of the Cost wizard. If the cost is a one-time cost, you can manually enter it from the Approve tab of the Cost Wizard.	Scheduled Costs offer the following benefits: Provide the exact amount and date of each income and expense in its own record. Since the income and expense items described by Scheduled Costs are not considered Actual Costs until you move them to the Costs table, you can experiment with the values of Scheduled Cost records; this can be useful for analyzing chargeback scenarios, and studying the impact of large expenses on your cash flow A Recurring Cost must be converted to a Scheduled Cost before you can approve it. Approved Costs are necessary to generate chargeback and issue invoices.	Scheduled Costs
Actual	Actual Costs represent historical events that have already occurred and whose values cannot be changed. Actual Costs are Scheduled Costs that have been approved. For example, rental income received on 1/1/2009. You generate Actual Costs by approving Scheduled Costs from the Approve tab of the Cost Wizard when these costs are certain.	Actual Costs: Cannot be changed. Can be used to generate chargeback. Can be associated with invoices (if the cost is a receivable), using the Cost Chargeback & Invoicing application. See Chargeback Administrator.	Costs

Cost

Description

Benefits

Stored in this Table

Recurring

One record that summarizes a regular cost, such as a monthly rent payment. You can also summarize an estimated one-time expense.

For example: a monthly rent cost (income) for $1000, beginning 1/2009 and ending 12/2009.

You enter Recurring Costs using the Cost wizard.

Recurring Costs:

Take the least data entry, as you enter one record, rather than records for specific occurrences of the bill; for example, one record that describes a monthly bill for a year, rather than 12 monthly records.
Can act as a template used to generate individual Scheduled Costs records when you need them.
Can be used to generate Cost reports, Cash Flow reports, and base rent reports.

Recurring Costs

Scheduled

An individual cost that is planned or budgeted, and can be changed at will. These costs provide the exact amount and date of each income and expense in its own record as an individual cost.

For example, expected rent Amount - Income $1,025.00 that is payable on 1/1/2009.

You can also have the system generate Scheduled Costs based on Recurring Costs from the Schedule tab of the Cost wizard. If the cost is a one-time cost, you can manually enter it from the Approve tab of the Cost Wizard.

Scheduled Costs offer the following benefits:

Provide the exact amount and date of each income and expense in its own record.
Since the income and expense items described by Scheduled Costs are not considered Actual Costs until you move them to the Costs table, you can experiment with the values of Scheduled Cost records; this can be useful for analyzing chargeback scenarios, and studying the impact of large expenses on your cash flow
A Recurring Cost must be converted to a Scheduled Cost before you can approve it. Approved Costs are necessary to generate chargeback and issue invoices.

Scheduled Costs

Actual

Actual Costs represent historical events that have already occurred and whose values cannot be changed. Actual Costs are Scheduled Costs that have been approved.

For example, rental income received on 1/1/2009.

You generate Actual Costs by approving Scheduled Costs from the Approve tab of the Cost Wizard when these costs are certain.

Actual Costs:

Cannot be changed.
Can be used to generate chargeback.
Can be associated with invoices (if the cost is a receivable), using the Cost Chargeback & Invoicing application. See Chargeback Administrator.

Costs

Creating Scheduled Costs from Recurring Costs

There are a few reasons why you may want to create scheduled costs from your recurring costs:

Recurring Costs cannot be charged back or invoiced.
You may need to record actual dates and amounts to precisely calculate cash flow. For instance, rather than using a Recurring Cost to document that you receive rental income every month, you may want to record the exact dates that the income arrives and the amounts you receive.
To gain a more accurate picture of how your operational costs affect building performance, you may wish to record the actual costs of tasks such as snow removal and maintenance.
The Recurring Costs table does not include fields for recording when expenses were paid. If you want to chronicle when payments were actually made, you need to track the costs as Scheduled Costs.

Real Estate Portfolio Management / Cost Administration / Cost Administrator

Understanding Costs

Creating Scheduled Costs from Recurring Costs

See Also