This article describes how to do a recovery reconciliation and explains the calculations. For information about setting up recoveries at the tenant level, click here.
To run a recovery reconciliation
1. Go to Accounting > Commercial > Recovery Reconciliation.
2. Complete the filter. At a minimum, you must enter the Property, Expense Year End, Post Date, and Post Month.
Note: If you want to reconcile a month or a quarter instead of a full year, click here for information.
3. If you are running the reconciliation for the first time, click Calculate. If you have already calculated the reconciliation and want to view the previous results, click Display.
The bottom half of the screen displays a report.
Note: The Expense Share amount on the first line (2500) is not a calculated amount, but is the result of a Cap in the recovery setup for the tenant. The calculated amount would be higher; the cap limits the amount to 2500.
4. To add an additional amount to the Expense Share figure (the calculated amount for the tenant), click the amount in the Expense Share Adjustment column. You can enter positive or negative amounts.
Note: If you enter an adjustment and then click Recalculate, the adjustment amount is reset to zero. Also, if you post a reconciliation with an adjustment, the Posted column will show No.
5. After reviewing the report, click Post. Breeze creates the reconciling charges.
Recovery Reconciliation Calculations
The basic calculation is Net Expense Share - Estimate Billed = Amount Due.
The other columns on the screen are used to calculate the Net Expense Share.
Operating Expense - Base Year Amount = Expense Over Base Year.
No of Days is used to prorate the expenses, if the tenant did not occupy the unit the entire year.
Expense Over Base Year (prorated, if applicable) * % Share = Expense Share.
Expense Share + Management Fee + Expense Share Adjustment = Net Expense Share.
The % Share figure is entered on the tenant setup for recoveries. On that screen it is called Fixed Prorate Share.
Recommendation Regarding Manual Reconciliation Charges
We do not recommend creating reconciliation charges manually. If you add manual charges, they are included in the calculations for the year’s Estimate Billed amount.
In your first year using Breeze, you may need to enter manual reconciliation charges in order to establish beginning balances. We recommend using the Alter Worksheet Month function to ensure those charges don’t impact your recovery reconciliation.