Commercial landlords with a dozen buildings dread the annual service charge reconciliation, often six weeks of spreadsheet archaeology. Expense coding on arrival, per-lease allocation and variance flagging run automatically, so year-end statements assemble themselves with backup attached.
Typical results
-83%
Reconciliation time
2
Tenant disputes, down from 14
100%
Invoices coded on arrival
Figures reflect typical results for this kind of automation.
The challenge
Twelve buildings, hundreds of vendors, and ninety-odd leases each with its own recovery terms — caps, exclusions, different pro-rata bases. All of it met once a year in a six-week reconciliation marathon where a single miscoded invoice meant re-allocating an entire building. Tenants disputed statements they couldn't trace, and recoverable costs quietly leaked when coding was wrong.
Before and after
Year-end reconciliation
−83%Tenant disputes
−86%Leaked recoverable costs
−88%The automation
We connected the invoice inbox to an AI coding step: every operating expense is read, coded to building and cost category, and marked recoverable or not the day it arrives. Each lease's terms live in a rules table, so allocation — pro-rata shares, caps, exclusions — happens continuously, not in December. Monthly variance checks compare spend against budget and prior year, flagging anything unusual. At year-end, tenant statements roll up automatically with line-level backup.
How it works
- 01
Coded on arrival
Every operating expense invoice is read by AI and coded to building, cost category, and recoverability the day it arrives.
- 02
Allocated per lease
Each lease's terms — pro-rata shares, caps, exclusions — are applied continuously, not in December.
- 03
Variance watch
Monthly spend per category is compared to budget and prior year; anything unusual is flagged immediately.
- 04
Statements assembled
At year-end, tenant statements roll up automatically with line-level backup attached.
- 05
Review and send
The property accountant reviews the flags and issues statements within days of closing the year.
Starts from
- Operating expense invoices
- Lease terms per tenant
Delivers
- Annual tenant statements
- Variance flags
- Cost dashboards per building
The impact
Year-end reconciliation typically shrinks from six weeks to five days, because the statements are effectively done before the year closes. Tenant disputes fall from about fourteen to two because every line traces to its invoice, and coding errors that leak about four percent of recoverable costs are caught monthly.
Questions about this automation
How are operating expense invoices coded?
Invoices arriving in the shared inbox are read by AI, which extracts the vendor, amount and description and codes each one to a building, a cost category and recoverable or non-recoverable. Low-confidence coding goes to the property accountant for a quick check, and every decision is stored with the invoice.
How are lease terms applied to the allocation?
Each lease's recovery terms live in a rules table: pro-rata share, caps, exclusions and the basis used for each building. Coded expenses are allocated against those rules as they arrive throughout the year, so at year-end the tenant statements are already calculated and only need a review.
What does the monthly variance check look for?
Each month, spend per building and cost category is compared with the budget and the same month last year. Large swings, duplicate invoices and costs coded to an unusual category are flagged for review. This is a multi-step build, usually rolled out in stages, starting with invoice coding.