Property management · Real estate and construction
Property management where owners' money and the firm's money are kept apart
A property manager collects money that mostly belongs to someone else and spends it on running buildings it does not own. We keep owners' and occupants' money apart from the firm's, reconcile every maintenance charge to the cost it recovers, and tie manpower billing to attendance and payroll. The firm can then show any owner exactly where their money went.
In one paragraph
Property and facility management firms run completed residential communities, office buildings and mixed-use properties for developers, owners and associations. The work spans facility management, maintenance collection, utility recharges and lease administration. The firm holds and spends client money and earns a fee or margin on top. Its owners and finance heads also run a large on-site workforce whose cost is billed back to clients.
Managing director or finance head, sometimes with the head of operations
The economics
How the money moves in this trade
Revenue is a management fee, a fixed monthly charge or a cost-plus margin on the cost of running each property. Collections include maintenance charges, utility and power-backup recharges, sinking fund contributions and sometimes rent collected for owners. All of these belong to the property or its owners rather than to the firm. Spending covers housekeeping, security, technical staff, repairs, diesel, water and annual maintenance contracts.
Most of the cost is people, supplied directly or through manpower contractors, so wage, provident fund, ESI and contract labour obligations sit at the centre of the business. Clients pay on monthly invoices, often late, while wages are due on fixed dates. Each property is effectively its own small business. The firm's own margin becomes visible only once each property's collections, cost and fee are separated.
The problem
Where the numbers usually break down
Client money is held in the firm's own accounts
Maintenance collections from several properties sit in one bank account, so a shortfall at one building is quietly funded by another and no owner can be given a clean statement.
Maintenance charges do not track maintenance cost
The monthly charge per square foot was set at handover and is not compared with what the building actually costs to run, so annual reviews start from argument rather than evidence.
Manpower billing does not agree with payroll
Clients are billed for the deployed headcount, while attendance, relievers and overtime are paid on different records, and disputed invoices follow.
Power and utility recharges run below cost
Diesel, grid power and water are recharged at a rate fixed months ago, and the loss on each unit recharged is absorbed without being measured.
Sinking funds are not separately tracked
Contributions collected for future major repairs are mixed with operating collections and spent on routine expenses.
What we do
The work, and the result each part produces
Client money separated by property
Collections and payments for each property held and reconciled separately from the firm's own funds, with a monthly statement per owner or association.
Every owner can see exactly what was collected and spent on their property.
Maintenance cost pool and charge review
Actual running cost of each property compared with maintenance charges billed, with a reasoned basis for the next revision.
Charge revisions are proposed from evidence.
Manpower billing tied to attendance and payroll
Deployed headcount, attendance, relievers and overtime reconciled to both the client invoice and the payroll.
Invoices stand up to the client's checks.
Utility and power-backup recharge costing
Diesel, grid power and water cost per unit compared with recharge rates by property.
Recharges cover their cost or the gap is known.
Sinking fund register
Contributions, interest and approved spending tracked for each property apart from operating funds.
Long-term repair money is available when it is needed.
Property-level and firm-level margin
Fee and margin by property after direct cost, then the firm's overhead, reported monthly.
The firm knows which contracts earn and which subsidise others.
Where we start
The first steps of an engagement
Bank accounts and agreements
We ask for every bank account the firm operates, the management agreement for each property, collection registers, maintenance charge schedules, deployment rosters and payroll.
Client money traced by property
Collections and payments are traced to each property and reconciled to the bank. Any shortfall at one building funded from another's money is identified.
Property-level ledgers
Each property gets its own ledger, separate from the firm's funds, with sinking fund contributions held apart from operating collections.
Owner statements and cost review
The first report gives each owner or association a statement of collections and spending, and compares the building's running cost with the maintenance charge billed.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Client money reconciled by property
- Maintenance cost against charges billed, by property
- Billed headcount against attendance and payroll
- Utility recharge rate against cost per unit
- Sinking fund balances held apart
- Contract margin by property
Who it suits
Written for, and not the right fit for
- You are a residents' welfare association managing your own building; our associations and RWAs page is a better fit.
- You need the association's or owner's accounts audited; that audit is performed by an independently engaged professional.
- Property and facility management firms running residential communities, offices or mixed-use properties for owners and associations.
- Firms with a large deployed workforce whose billing and payroll run on separate records.
- Developers with an in-house maintenance company handling buildings after handover.
Services
Services this work draws on
Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗Payroll and labour compliance
Every payroll cycle reconciled, with the statutory workflow attached.
Explore service ↗Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗Costing and profitability
What each product, line and customer really contributes.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Do we need a separate bank account for each property?
Not always, but each property's money needs to be separately identifiable and reconciled. Separate accounts make that easiest, especially where an association or owner expects its own statement.
Can you handle payroll and labour compliance for our site staff?
Yes. We run payroll, provident fund, ESI and the related returns, and tie the payroll to client billing so both rest on the same attendance.
Will you audit the association's accounts we maintain?
No. That audit is done by an independently engaged professional. We keep the accounts in a form that makes the audit straightforward.
5th Quadrant maintains property-level accounts, payroll and statutory labour filings and prepares owner statements. Audits of an association's or owner's accounts, statutory audit and tax-audit reports are performed by an independently engaged professional, coordinated through 5th Quadrant. Full detail is on our Professional Scope page.
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