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As 2016 draws to a close Knight Accountants Service Charge Division continues to grow at a rapid pace. The value of the properties we financially report on now exceeds £3 billion and there no signs of this growth slowing up.

We have seen the department grow rapidly throughout the year with agents switching to us from London, Bristol and Manchester to name a few. There is a steady increase in self-managed blocks and we have benefitted from Managing Agents reviewing the service they are currently provided. Based on the many conversations we have had with Managing Agents, Freeholders and Leaseholders we have identified the three main reasons below why firms are switching to Knight Accountants.

Compliance

We have seen many changes in the property management industry in the last decade and it is essential that we keep on top of guidance and legislation as many of our clients are ARMA and/or RICS regulated. Our client mix is around 50% service charge so we have to keep on top of latest legislation and the team regularly attend IRPM and ARMA courses with a focus on service charge accounting. Bespoke internal training days are also arranged from accounting to interpretation leases. The block management industry has become a legal minefield and the financial element is a pivotal factor when it comes to recovering service charges.

Timescales

One of the most common reasons for firms to change to us is the turnaround times that accounts are processed. In a fast moving industry, landlords questionnaires arrive daily, balancing adjustments need accounting for and applied ensuring the necessary cash flow for the block. Our aim is to complete accounts within 2-4 weeks and will give plenty of notice if we feel we cannot fall within this timescale. Why do we want accounts sitting around the office? If our lead times increase it is time to grow the Knight Accountants family.

Family run business

More and more people are looking at appointing smaller firms for that personal service in our experience. During uncertain times that we are currently in people are looking for value for money and seem to prefer supporting families rather than investors and shareholders. At Knight Accountants we look after all of our clients irrespective of size. Our primary objective is to help people manage their businesses and homes and this is reflected in our responsive day-to-day service. In 2016 Knight Accountants has invested a substantial percentage of profits to local community projects which clients give us really good feedback about.

To benefit from Knight Accountants specialist department feel free to contact Graham Knight for an informal chat on 01424 869169 or graham@knightaccountants.co.uk

Alternatively you can visit http://knightaccountants.co.uk/service-charge/

Knight Accountants specialist Service Charge Accounts division continues to gather pace as more Managing Agents continue to switch their portfolios to our services.

We have seen rapid rise this year which has seen our service charge division grow 30% in just 5 months. One of the key factors of the growth is the upgrade in IT systems whereby clients can upload all accounting files to a secure area of our server together with our specialist knowledge of block management software across various providers.

The division is headed up by Partner Graham Knight who has over 10 years direct industry experience having previously worked for two ARMA members before forming Knight Accountants in 2006.

Graham said “We have done a great deal of Marketing within the sector as well as the recent launch of Knight Block Accounts. We are also benefitting from blocks passing from different managing agents and the new agent is seeing how we work with regards to transfer of data, complying with legislation and our timescales which are extremely important to agents. We work closely with Managing agents and I can honestly say that each and every agent has a tailored service that suits their exact requirements”.

To see how Knight Accountants can help your Managing Agent contact 01424 869169

Knight Accountants are specialist service charge accountants working with Block Managing Agents across the UK.

Before I begin I just need to briefly explain a little about me and why I devised the “4 Wave Approach” at Knight Accountants….I had previously worked for eight years as a Service Charge Accountant for two managing agents in the South East, both of which were ARMA members. Throughout this time I constantly strived to improve the way in which the accounts department operated. Through trial and error and year on year experience I felt that I had got an approach that worked very well. Ideas I share with my clients today!

However…one problem…the external accountant and timing…In order for the “4 Wave Approach” to work I needed a responsive external accountant who could turn around the service charge certification process quickly to fit into my timing schedule. This unfortunately proved to be difficult over my eight years working in the industry.

Therefore when Knight Accountants was born in 2006, we set out to make this process easy and seamless for agents!

It all comes down to TIMING….

NOTE: I am aware that year-ends are in accordance with the lease for ease I have assumed all year-ends coincide with the quarter dates. An assumption has also been made that the agent manages between 50-150 blocks whereby there might only be one or two members of accounts staff dependant on the size of the blocks.

The 4 wave approach diagram is at the foot of this Blog but I will briefly explain the process as an example;

EXAMPLE

Agent ABC
Working year 2015

Towards the end of 2014 budgets for December 2015 year-ends are prepared and where necessary are sent for approval. These are then sent out in order for leaseholders to arrange payment by the due date in accordance with the lease.

Once you have returned to the office after the Christmas break you are then preparing accounts in readiness for certification. This will typically include entering any final supplier invoices, prepayments and accruals and reconciling the bank account to name a few.

These are then handed over in bulk or drip fed as and when they are ready to the accountant.

This is when problems can arise! Technically the accountant thinks they have until 30th June (assuming a 31st December year-end) to get the accounts back!

Under the “4 Wave Approach” this could not be further from the truth!

In my view the aim should be, whilst working with your accountant to streamline the process, to complete all December year-ends by mid February! This is why…

For a small accounts team the ideal scenario would be that if the December year-ends are not circulated by the end of February the agent is then hit with the next “Wave” to prepare budgets for the March year-ends. So there is a conflict of where time should be spent. Of course in reality you would prioritise the budgets/demands for payment being sent but this decision does not have to be made under the “4 Wave Approach”.

Summary:

In my experience the financial year in the leases are generally run in line with the 4 quarter dates with the majority being in December (25th or 31st) or March (24th or 31st). With less financial years ending in June and September.

The idea of the “4 Wave Approach” is to clear that quarters work before the next quarters “Wave” comes along.

Below in the diagram are the 4 purple blocks where your accountant should be aiming to process all accounts within the time slots, usually lasting approximately one month. Please note this is a generic guide and this does not necessarily works for all types and sizes of agents.

The Knight Accountants team have successfully implemented the “4 Wave Approach” working in conjunction with our clients. In my view it is a great system and it works!

Contact: Any questions or comments please direct them to graham@knightaccountants.co.uk and I will be happy to explain these points any further.