Residential Service Charge Accounts

The management of joint costs and the collection of service charge funds from leaseholders usually falls to a dedicated Right To Manage (“RTM”) company, owned equally by the leaseholders, although other arrangements may exist depending on the history and ownership of the property. Typically the RTM company will outsource this function to a specialist letting agent, as the process can be quite technical, challenging and also very time-consuming.

In any event, it is important that these service charge costs are correctly and accurately accounted for, and presented to the leaseholders in an appropriate and timely manner. Iambe Advisory can assist with the process of the preparation of service charge accounts for presentation to leaseholders. We have years of experience acting as an independent advisor, giving leaseholders peace of mind that the service charge accounts reflect the necessary costs incurred during the period under review. Our review procedures are laid down by the ICAEW and include:

• Comparison to budget.

• Test check of key expenses to invoices and receipts.

• Review of bank statements for unusual entries.

• Confirmation of bank balances at the year-end.

• Other procedures as may be agreed with the managing agent.

In addition to the preparation of service charge accounts, there will usually be an incorporated limited company created to act as the RTM company – this company will likely be dormant, but will still be required to prepare statutory accounts that need filing at Companies House; Iambe Advisory can assist with this aspect of the work also.

Our approach and involvement will depend on the quality of the financial information presented to us, but the scope and nature of our work will always be agreed with you in advance. We would always agree a time-frame for the assignment and keep you updated as our work progresses, and we always keep an eye-out for any areas of improvement to your processes, systems and controls to ensure that we can pass on any efficiency or performance improvements to better enhance your reporting moving forward.