A CAM true-up comes after the bill year. CAM means Common Area Maintenance. It covers shared building costs. A true-up shows the final amount due. Check the bill and lease. Check each CAM payment. Then check the client plan. See the accounting firm hub.
The client forwards it to you with two words: "Is this right?"
That is the fractional CFO's moment. Not the bookkeeper's. Not the controller's. Yours.
CAM Reconciliation Statement: An annual accounting from the landlord comparing estimated CAM payments collected from tenants against actual operating expenses incurred during the year. The result is either an additional charge or a credit to each tenant.
First move: size the gap
That number is a starting point, not an answer. Big gaps happen for real reasons. Maybe a new roof, a tax reassessment, or a jump in insurance. They also happen for bad reasons. The landlord may have made a math error. They may have added costs the lease excludes. They may have used the wrong pro rata share. Pro rata share is the slice of costs a tenant owes, based on its floor area. Or they may have skipped a gross-up. A gross-up fills in costs for empty space as if the building were full.
Your first job is to find out if the gap makes sense. Do that before you tell the client what to do.
What to request before you advise payment
Do not advise payment on a big true-up without the detail. The reconciliation statement is a summary. The backup is the building's expense ledger, split by cost type.
Request these four things from the landlord in writing:
- The full expense reconciliation. It should show each cost type, the total building cost, and the tenant's share.
- The pro rata share math. It should show how the tenant's percent was set, and which square footage was used.
- Any capital costs in the bill. The lease controls whether and how they may be included.
- The management fee math. Compare the billed method with the lease method.
Compare monthly CAM pay with the final bill. Check the lease and files. If the gap is unclear, ask for backup.
The client talk: what it is and the options
Once you have sized the gap and decided whether to review first, frame it for the client. Do not lead with alarm. Do not lead with comfort. Lead with facts and options.
Then give three options. Pay now, if the client trusts the landlord and does not want to spend time on it. Review with backup before paying. Or refer for a formal audit if the amount is worth it.
Choose a review path from the lease, files, and business effect. Start with files that need help first.
When to escalate to a formal review
The key question is whether the gap is worth the cost of a formal review. I built CAMAudit because CFOs and their clients kept hitting this wall. A big, odd bill, and no easy way to check the math.
A law firm in a renewal window has extra reason to care. A pattern of overbilling is leverage in the talks. A formal audit that recovers a past overcharge is leverage too.
Cash flow impact and how to model it
Plan for the cash need before you approve payment. A surprise charge may need a file check. It may change the cash plan.
The fix is to build true-up risk into the model from the start of the year. Estimate the prior-year true-up from known cost trends. Watch for tax reassessment notices, insurance renewals, and landlord notes about capital projects. Flag the estimate as uncertain. Give it a low and a high case.
For many sites, plan one site at a time. Keep CAM pay apart from the final bill. Check each lease and bill first.
When the real true-up arrives and runs higher than your estimate, update the forecast right away. Then walk the client through the bridge. What was estimated. What was actual. What changed. That is the advisory value.
When delaying payment is the right call
The lease may have an audit-rights clause. It can set review time and steps. It may also cover a disputed amount.
It is reasonable to advise a delay in three cases. The backup was requested and has not come. A review is in progress. Or the disputed amount is large and the lease allows withholding. It is not reasonable to delay forever. Track the audit deadline closely.
The lease may say what payment changes. Read the audit-rights clause before the check goes out. Ask counsel when needed.
The advisory service you can already offer
CAM review may help with cash and site costs. List the work in the signed letter. List what the work does not cover.
The real question is whether you have the right tools to do it fast. Reviewing a CAM reconciliation by hand, line by line, against the lease takes time and lease know-how. You can refer it to a specialist who uses a structured audit tool. Then you offer the service without building the skill in-house.
The value to the client is the same either way. Someone checked the math before the check went out.