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CAM and Reconciliation Workflow

To reconcile provisional costs with actual location operating costs, the mapping between the expense categories defined in Financial Organization Structure and expense groups must be set up in the Admin section. Similarly, operating cost expense types must be created and mapped to an expense group in the Admin section.

Expense groups are used to categorize operating cost expense types into four defined groups:

CAM
Taxes
Utilities
Other

The following diagram shows the mapping between the expense categories defined in Financial Organization Structure, expense groups, and operating cost expense types:

The application performs reconciliation per expense group. The reconciliation occurs between the non-lease terms entered per expense category (i.e., the provisional amounts) and the operating cost expense type (i.e., the actual operating costs), which are linked by the expense group. For example in the above diagram, the amount defined in non-lease term 1 is reconciled with the snow removal cost that was entered in the location.

When you create lease reconciliation periods, you must link conditions to operating costs to define the portion of the operating costs (entered at location level) that is associated to this particular lease.

To properly reconcile expenses and operating costs, the following workflow process must be followed:

Create a location, premises, and lease.
In your lease:
1. Create your lease conditions. Note that for conditions to be included in reconciliation calculations, the Condition Type must be set to "Pro Share".
2. Create non-lease terms in the Contract and Terms tab in your lease and select expense categories that are mapped to any of the four expense groups. The payment amount represents the provisional amount that will be used in reconciliation calculations. For more information on creating terms, refer to Rent Table and Lease Accounting (IFRS 16/ASC 842 Compliance) or Rent Table (Standard Real Estate), depending on the configured mode of operation of Nakisa Real Estate.
Activate your lease.

At the end of the year (or whenever you choose to do reconciliation), navigate to your location.

In your location, create an operating cost period that defines the date range for the operating costs and enter your operating costs for the period.
Navigate back to your lease. In the Reconciliation tab, create a reconciliation period where you will link your conditions and operating costs by mapping operating cost expense types to your condition expense types. For more detailed information on how to create these periods, see Performing Reconciliation.
To calculate amounts for reconciliation, edit the period. The application calculates owed amounts.
If required, you can create a one time payment for the amount which can be posted from the Scheduled Payments module.