Identifying Errors in Service Charges
Service charges can be complex, and errors are more common than most property professionals realise. Landlords, project managers, and facilities managers often find themselves paying for incorrect, duplicated, or misallocated charges. EG-Audit provides independent analysis to uncover errors and secure transparency in your property costs.
Understanding Common Service Charge Errors
Errors in service charges can appear in multiple areas:
- Misallocated Costs: Shared expenses incorrectly apportioned between tenants.
- Duplicate Charges: Same service or work billed more than once.
- Incorrect Categorisation: Capital expenditure billed as recoverable service charge.
- Overestimated Usage: Energy or water consumption billed above actual readings.
- Unsupported Fees: Charges without invoices, receipts, or contractual backing.
Recognising these common errors is the first step to correcting them.
Gather and Organise Documentation
Start by collecting all relevant documents:
- Service charge statements and invoices
- Maintenance, cleaning, and security contracts
- Energy and utility invoices
- Insurance policies and related billing
- Correspondence with suppliers or property managers
EG-Audit provides a structured checklist to ensure no relevant documentation is missed.
Review Each Line Item
Check every line of the invoice for accuracy:
- Verify calculations: unit costs, quantities, and totals
- Compare against contracts and agreed rates
- Check historical invoices for consistency
- Confirm allocations for shared services
- Identify missing documentation or evidence
EG-Audit reviews each line to ensure charges are correct, justified, and contractually compliant.
Identify Red Flags
Certain indicators may suggest errors or overcharges:
- Unexplained increases in charges
- Duplicate or repeated entries
- Charges for services not delivered
- Misclassification between capital and operational expenditure
- Invoices lacking sufficient detail
EG-Audit highlights red flags with supporting evidence to guide corrective action.
Verify Supporting Evidence
Every charge should be supported by verifiable evidence:
- Invoices and receipts from suppliers
- Work orders and completion reports
- Meter readings or consumption logs
- Contracts and service agreements
- Correspondence authorising additional services or costs
Charges lacking evidence are potential errors that require further investigation.
Cross-Check Against Agreements
Compare charges with lease agreements, contracts, and terms of service:
- Confirm services are recoverable under lease terms
- Check contract rates and caps
- Identify non-recoverable costs erroneously included
- Validate amendments or variations to contracts
- Ensure fair allocation of shared costs
EG-Audit ensures all charges align with legal and contractual obligations.
Quantify Errors and Overpayments
Once discrepancies are identified, quantify the financial impact:
- Calculate overpaid amounts for duplicate or misallocated charges
- Identify cumulative impact over multiple periods
- Assess potential refunds or credits
- Document all findings with evidence
- Prepare a clear summary for review and action
EG-Audit provides detailed reports quantifying overpayments and supporting recovery.
Take Corrective Action
Once errors are quantified, engage suppliers or landlords to correct charges:
- Present evidence clearly and professionally
- Request adjustments, refunds, or credits
- Follow contractual dispute resolution procedures
- Maintain records of all communications
- Escalate to independent audit if resolution is delayed
EG-Audit guides property professionals through the corrective process to ensure outcomes are practical and financially beneficial.
Benefits of Identifying Service Charge Errors
- Recover overpaid amounts and protect budgets
- Prevent recurring billing mistakes
- Improve transparency and accountability
- Enhance budgeting and forecasting
- Strengthen confidence and control in property management
Systematic identification of errors turns uncertainty into actionable insight.
Take Action Today
Service charge errors are more common than many property professionals realise. EG-Audit provides independent, evidence-based audits to review every line item, identify errors, and recommend corrective action. Protect your property budgets and secure clarity today.