A recurring cost is a regularly occurring cost or estimated cost which is documented with one record—a Recurring Cost record—that describes the income or expense and its pattern (how often it occurs, the rate at which it increases or decreases, the time period during which the cost applies, and so forth). Recurring costs are stored in the Recurring Costs table
Recurring Costs provide a means of quickly modeling the major components of your finances. You first establish a series of recurring costs to represent such items as tax expenses, estimated maintenance costs, and monthly income from leases. Once you enter this information, you can use these costs to generate Cost, Cash Flow, and Base Rent reports.
Additionally, when you need a specific instance of the cost, users of the Cost Administration application can use Recurring Costs records to generate Scheduled Cost records. From the Schedule tab of the Cost Wizard, you can select the Recurring Cost records and click Schedule; you are asked to enter an End Date that determines how many Scheduled Cost records the system creates. For example, if you pay a monthly rent you can develop one Recurring Cost record that describes the expense, the date of the month it is due, and the time period during which the monthly rent is due (for example, the start and end date of the lease associated with the rent). When you need an individual record for a specific instance of the cost, you can have the system generate that record for you by scheduling the Recurring Cost. In this way Recurring Cost records reduce data entry. See The Cost Wizard Process.
Note: The Leases cloud module supports only recurring costs; it does not support scheduled costs, actual costs, or the Cost Wizard.
Use recurring costs to:
For costs that are fairly static, enter one Recurring Cost record describing the cost, rather than create individual Scheduled Cost records for each time you encounter this cost. For example, enter one Recurring Cost record describing your monthly rent for a year rather than enter 12 Scheduled Cost records for each rent bill. For costs that change at a fixed rate, complete the Yearly Factor field of the Recurring Costs table.
Rather than enter the exact amount of each monthly utility bill as a Scheduled Cost, enter a monthly estimate with a Recurring Cost record by completing the Period field with "Month", the Amount-Expense with an estimate of the monthly bill, and the Start Date field. Since utilities are ongoing costs do not complete the End Date field.
If you incur landscaping costs only between April and September, create a Recurring Cost record for landscaping with a Seasonal Start Date of April 01 and a Seasonal End Date of September 01 (the year value is ignored). The system will only consider this recurring cost during the specified time frame.
When you are using the lease indexing feature, the application creates updated recurring cost records that reflect the cost adjustment determined by the indexing. You work with these costs by scheduling and approving them as you would any recurring costs.
The application updates the original recurring cost record by entering the End Date for this cost transaction. Since this cost has been replaced by the cost record that has the updated rent based on the indexing, the application sets the Active? status flag to No. This means that the cost will not be used in calculations or shown in reports.
For auditing purposes, the application saves a record of the rent change event in the Cost Transaction Logging table.
See Also
Cost Administration: Application Overview
Cost Administration: Understanding Costs
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