Lease accounting software consultant: CAM audit as a gap analysis deliverable
ASC 842 is the lease accounting rule. It makes firms value the right to use leased space and the lease debt. That value uses the present value of lease payments, including variable costs like CAM. CAM means common area maintenance, the shared costs a landlord bills back. You set up CoStar Real Estate Manager, Visual Lease, LeaseQuery, or ProLease. You already pull CAM terms from leases and enter payment history. But no platform checks one thing. Did the landlord bill CAM the way each lease says? That open question is a gap analysis you can deliver.
Adding a CAM audit step does not need new skills. The documents are the same. The lease reading work lines up with what you do. The client gain is clear. It shows up in cleaner statements and in cash they can win back. I built CAMAudit to make this step the same every time. So you can run it as a standard deliverable. You do not build the work from scratch on each job.
Variable lease cost overcharge: A CAM charge billed by the landlord that exceeds what the governing lease terms permit, classified as a variable lease cost under ASC 842. Because variable lease cost estimates feed into right-of-use asset and liability calculations, a systematic overcharge inflates the balance sheet presentation of operating lease obligations. Identifying and correcting overcharges improves both financial statement accuracy and the company's cash position.
How CAM overcharges flow into ASC 842 numbers
A CAM overcharge moves through the lease debt in a set path. When you can show that path, the case for a review lands. It lands with the accounting teams and audit committees who pay for these projects.
Under ASC 842, the lease debt is the present value of payments not yet made. You discount them at the borrowing rate. Payments include fixed base rent. They also include variable amounts tied to an index or rate, or amounts that are fixed in substance. For most NNN leases, monthly CAM runs as a set payment with a year-end true-up. NNN is a net lease where the tenant pays the shared costs. So that CAM counts as fixed in substance.
Say the monthly CAM estimate is built from past bills that hide steady overcharges. Then the debt is too high by the present value of those overcharges over the rest of the term. Take a 5-year term left at a 6% borrowing rate. A $5,000 yearly overcharge lifts the lease debt by about $21,000.
This table shows the overstatement by overcharge size and term left.
| Annual overcharge | Remaining term | Discount rate | Liability overstatement |
|---|---|---|---|
| $3,000 | 5 years | 6% | ~$12,600 |
| $5,000 | 5 years | 6% | ~$21,000 |
| $8,000 | 7 years | 6% | ~$44,600 |
| $12,000 | 10 years | 6% | ~$88,300 |
Take a tenant with 15 NNN locations and a $5,000 yearly overcharge each. The total lease debt overstatement nears $315,000. That is a material statement problem for firms with otherwise clean ASC 842 numbers.
Why platforms do not check billing
CoStar Real Estate Manager, Visual Lease, LeaseQuery, and ProLease track what the tenant agreed to pay. They track what the tenant pays. They do not check that those payments match each lease's terms.
The limit is simple. The software stores lease terms as data fields. It can hold a CAM cap as a value. But it cannot read a landlord's reconciliation line by line. A reconciliation is the landlord's year-end true-up of actual costs. So it cannot test each charge against the lease's exclusion list, gross-up formula, and fee cap.
This means every setup hides one guess. It assumes the entered payments are billed right. When that guess is wrong, the ASC 842 number carries the error. A CAM review trades the guess for a checked answer.
Here are billing problems the platforms cannot catch.
Pro rata share trick. Pro rata share is the tenant's slice of total cost. The landlord may compute it on a base that leaves out anchor space the lease says to include. Then the tenant's percent is too high every year. The system stores the bill, not the math behind it.
Fee above the lease cap. The management fee rate on the CAM pool may top the lease cap. The extra is billed every year. The software stores the payment, not the rate math.
Base year mix-up on a gross-to-NNN switch. A lease may start as a gross lease, then switch to NNN by amendment. The base year for CAM can turn unclear. The base year is the cost level the lease uses as a starting point. Landlords sometimes pick a base year that helps them. The software cannot judge which reading is right.
The gap analysis deliverable
To sell the audit as a gap analysis, scope it clearly. It should slot into the project you already run.
What the work covers:
- Review of CAM reconciliations for the last 1 to 3 years per location
- A check across the CAM detection rules against the lease terms
- Overcharge amounts by rule and by year for each location
- A findings report with lease citations and reconciliation line citations
- Fixed variable payment inputs for the ASC 842 model where overcharges show up
What the client gets:
- Findings reports for each location, with any overcharges noted
- Fixed variable payment estimates for the lease debt math, where they apply
- Correction drafts for any finding the client wants to pursue (optional add-on)
Typical timeline: 5 to 10 business days per location after you get the documents. It depends on lease detail and the years in scope.
Where it fits in the project. Run the gap analysis with or right after the lease abstraction step. Your team already pulled the documents. The review uses those same files. It returns findings that fix the payment inputs before you lock the debt model.
"I built CAMAudit because the gap between what a lease says and what a landlord charges rarely gets examined at the systematic level. Lease accounting implementations are the perfect time to close that gap, because you already have every document you need and the financial statement case is concrete." - Angel Campa, Founder, CAMAudit
Pricing the gap analysis
Price the review on two levels. First, the per-lease fee that sets the add-on for each client. Second, the practice economics that show what the service adds to yearly revenue.
Per-lease pricing guidance:
| Lease complexity | Scope | Pricing range |
|---|---|---|
| Simple NNN, single amendment or fewer | 1-year review | $500 to $700 |
| Standard NNN with 2-3 amendments | 1-year review | $700 to $1,500 |
| Complex NNN with gross-up or CAM cap | 1-2 year review | $1,500 to $1,300 |
| Multi-amendment portfolio lease | 2-3 year lookback | $1,200 to $1,500 |
For projects with 20+ leases, a volume rate of $600 to $900 per lease is common. Total project revenue still runs well above single-lease pricing.
Practice economics at 40 leases per year:
Take a consultant on a CAMAudit white-label plan. White-label means the work carries your brand. Run 40 leases at $1,500 each.
- Gross revenue: $32,000
- Software cost: your current CAMAudit plan cost
- Analyst time (1.25 hours x $150 x 40 leases): $9,750
- Revenue left after staff time and platform cost: shown in the partner dashboard
- Margin: depends on your plan, staff time, and client fee
The per-lease fee sits below big ERP consulting rates. That is because these projects often hold many simpler leases at mid-market clients. The math works because volume makes up for the lower fee per lease.
Making the case to project sponsors
Sponsors for these projects are usually controllers, VP Finance, or CFOs. The talk that wins the add-on covers three points.
First, accuracy for the ASC 842 model. The debt math uses estimated variable payments. If those estimates come from bills with overcharges, the number is wrong by the present value of the overcharges. The gap analysis gives a checked baseline for those inputs.
Second, recoverable overcharges that fund the project. Most leases have an audit rights clause. It lets tenants review landlord expense records and dispute bad CAM charges. The lookback is often 1 to 3 years. If the review finds overcharges, the client has a clear basis to recover. On a 15-lease portfolio, recovery can top the whole project cost.
Third, ongoing work after the project. Once the review sets a baseline, yearly checks keep it current as new statements arrive. That makes a yearly engagement with each client who started with a project.
The white-label delivery model puts all of this under your firm's brand. The client and the repeat work stay with your practice.
Linking the review to audit rights
The gap analysis helps clients use their audit rights before those rights expire. Most leases set an audit rights window of 1 to 3 years after each yearly statement. If a client has never used these rights, the window for past years may be closing.
A project is often the first time a firm reviews all its leases at once. That is the moment to find overcharges with enough time left to recover them. Wait until the project ends, and some chances may be gone.
This urgency is real, not made up. The audit rights window is a true lease limit. When you raise it during the project, you add real value by catching recoverable amounts in time.
For clients who use their audit rights, the CAMAudit findings report is the basis for the landlord dispute. Each finding names the rule, the value the lease expects, the value billed, and the overcharge. That gives the client's counsel a clear, defensible record.
Frequently Asked Questions
How do CAM overcharges affect ASC 842 right-of-use asset and lease liability calculations?
Under ASC 842, the lease liability is calculated as the present value of future lease payments, including variable components like CAM that are probable of being incurred. If the tenant has been systematically overpaying CAM, the variable payment estimate used in the liability calculation incorporates the overcharge. This overstates both the right-of-use asset and the corresponding lease liability on the balance sheet. Correcting the overcharge estimate reduces both the asset and liability to their accurate values.
Which lease accounting software platforms create the most natural context for adding a CAM audit service?
The four platforms where this add-on is most natural are CoStar Real Estate Manager, Visual Lease, LeaseQuery, and ProLease. Each of these platforms requires consultants to abstract and enter lease payment terms, including variable CAM provisions, as part of implementation. The CAM audit adds a verification step confirming that those variable provisions are being billed correctly by landlords, closing the loop between what the system expects and what tenants are actually paying.
How should a lease accounting consultant price CAM audit as a gap analysis deliverable?
The most practical pricing for this context is firm-set fixed fees per lease, varying with lease complexity. Simple NNN leases with minimal amendments price toward $500 to $700. Complex leases with multiple amendment letters, gross-up provisions, and multi-year lookback requirements price toward $1,500 to $3,000. For ASC 842 implementations involving 20 or more leases, a portfolio rate of $600 to $900 per lease is common while maintaining strong total project economics.
What is the financial statement case for a CAM compliance review during ASC 842 implementation?
ASC 842 disclosures require the company to present lease liabilities that reflect accurate payment obligations. If variable lease cost estimates embedded in the liability calculation include systematic overcharges, the balance sheet presentation is inaccurate. A CAM compliance review during implementation ensures that the variable payment estimates entering the ASC 842 calculation represent actual lease obligations, not inflated billing from landlords who are calculating outside the lease terms.
What documents does a lease accounting consultant already have that CAMAudit needs?
The lease abstraction process for ASC 842 implementation requires collecting the original lease, all amendment letters, and any side letters modifying CAM terms. These are exactly the documents CAMAudit needs to run compliance detection. Additionally, the consultant typically requests or receives CAM reconciliation statements as part of gathering variable payment history for the ASC 842 disclosure. In most implementations, every document needed for the audit is already in the implementation file.
What are the most common CAM compliance findings in lease accounting implementation client portfolios?
The most frequent findings in lease portfolios reviewed during ASC 842 implementations are management fee overcharges (the fee rate applied exceeds the lease cap), pro-rata share calculation errors (the denominator formula in the lease differs from what the landlord used), and base year setup errors (the base year expense amount used by the landlord differs from the amount specified in the lease or its amendments). All three produce systematic annual overcharges that compound across the lookback period.
How does white-label CAM audit delivery work for a lease accounting consultant?
The consultant uploads lease documents and reconciliation statements to the CAMAudit portal under their own firm branding, runs the detection pipeline, reviews findings, and delivers a branded findings report to the client. The consulting firm is the face of the engagement throughout. The CAMAudit platform provides the detection engine, calculation verification, and findings documentation in a format the consultant can deliver as part of their implementation workstream.