Financial Auditing & Revenue Collection

The Work:

As is the case with many of our clients, the management team knew they had telecom contracts in place producing revenue share but weren’t confident in the accuracy or consistency of the payments they receive. RealtyCom has seen first-hand that while telecom agreements can often produce a substantial amount of revenue for an asset, ensuring the asset is paid correctly is a huge management task requiring time, accounting resources, due diligence, and a wealth of telecom industry contacts.

On the face of it, revenue management appears easy – you receive a check and deposit it, or even better an ACH payment is directly deposited into the account. However, in our business we see 15-25% recurring quarterly/monthly payments are either never initiated or are incorrect. These issues can cost Owner’s tens of thousands in lost and missing revenue each year. Most property management and accounting teams simply do not have the time to crosscheck the underlying contract, or the correct contacts to quickly resolve underpayment issues.  Further, Service Providers often lack or omit pertinent information in their reporting that would allow a substantive review and payment assurance.

Examples of issues we’ve experienced:

• Formal revenue transfer not occurring after the sale
• Uncashed checks or payments sent to the wrong address/entity
• Improper submission of TCO/COs or reimbursement invoices during construction
• Service Providers having the incorrect number of units for a property
• Miscalculations or “dropping” a service that should be included in the revenue share
• Service Providers have been known to stop-payments due to updated protocols or administrative documents
• Service Providers continuing to pay revenue based on an older agreement

To begin, it must be determined which Service Providers are serving each asset, obtain copies of all contracts, and gather past revenue statements. Thanks to our many years in the business and the exceptional working relationships we have with Service Providers, we know how best to obtain this information and expedite any payment resolution required.

RealtyCom supplies our client and the Service Provider with review analysis and documentation from the client to satisfy any outstanding issues to ensure future payments will be corrected. Additionally, we analyze and compare customer penetration and revenues with similar properties we revenue manage. Each year we continue to gain valuable insights through processing 9,000+ payments and rectifying a multitude of issues.

The Results:

RealtyCom’s work on this portfolio found:

• Over $329k was owed to our client – out of 73 properties, 28 properties had agreements requiring a full revenue audit.
• 70% of properties required proper paperwork to transfer the contract and revenue payments to the current Owner, including many new developments (where we see on average a 51% error rate).
• 25% of properties had received payments which were never received and deposited.
• One asset had an error in unit count resulting in underpayment, and another did not process assumption documents upon purchase of the property.