Coding service charge invoices to the right schedule

A lift maintenance invoice for an estate arrives. The amount is right and the supplier is known. The question that takes the time is which schedule it belongs to: the block with the lift, the whole estate, or a share of each.

Get it wrong and the invoice still balances. The wrong leaseholders pay, the year-end accounts need correcting, and someone has to explain the change. Here is how schedules work and how to code to them reliably.

What a schedule is

Leases on larger developments split service costs into schedules, sometimes called cost centres. Each schedule covers a part of the development and has its own apportionment, the share each unit pays. A typical estate might have:

• An estate schedule for grounds, roads and lighting, shared by every unit.

• A block schedule for each building, covering its cleaning, communal electricity and repairs.

• A lift schedule, shared only by the units the lift serves.

• A car park schedule, shared only by the units with a space.

• A commercial schedule for ground floor shops, with their own lease terms.

Within each schedule, the budget is split into headings, such as cleaning, electricity, lift maintenance and insurance. So a full coding is property, fund, schedule and heading, and every part of it decides who pays.

Where coding goes wrong

Most errors come from a handful of situations:

• The invoice gives the estate address without saying which block.

• A contractor works across several schedules, and the invoice covers more than one.

• A new supplier has no history to go on.

• One-off works arrive with a vague description such as “repairs as instructed”.

• A heading has been renamed or split since last year’s budget.

• The person who knew the site has moved on, and the knowledge went with them.

The evidence that gets it right

Good coding is mostly a question of evidence. Before anyone decides, it helps to have in front of them:

• The site address, and for utilities the supply address and meter number.

• The supplier’s history: which schedules and headings their last invoices went to at this site.

• The purchase order or works order, if there is one, which should carry the coding already.

• The contract, for planned maintenance, which says what the supplier covers.

• The current budget, so the heading matches what leaseholders were told to expect.

Repeat invoices from known suppliers can be coded from that evidence with confidence, and they are usually most of the volume. The rest deserve a person’s attention, with the evidence laid out so the decision is quick.

Splitting one invoice across schedules

Some invoices genuinely cover more than one schedule: a gardener who looks after the estate grounds and a block’s courtyard, or an insurance premium for the whole development. Split them on a documented basis, such as the contract’s own breakdown or a fixed proportion agreed with the client, and record the basis with the invoice so the split can be explained later.

Keeping coding consistent

• Hold a coding rule for each regular supplier at each site, and review it when contracts change.

• Put the coding on the purchase order, so the invoice inherits it.

• Ask suppliers to quote the site and your reference on every invoice.

• Keep the reason for each coding decision with the invoice.

• Review a sample of coded invoices each month, before year end does it for you.

Automating the routine part

Our invoice automation for property management suggests the property, fund, schedule and heading for each invoice from your records, supplier history and coding rules. Clear matches move on under your approval policy, and uncertain ones are held for your team with the evidence alongside.

For how coding fits with the rest of the job, see our guide to accounts payable for UK property management.