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The 30-Minute GL Review That Catches 80% of CAM Errors

By Angel Campa·Founder, CapVeri5 min read

The Problem With Full GL Reviews

A 200,000 SF office building generates 3,000-5,000 GL transactions per year across operating expense accounts. Reviewing every transaction at year-end takes 8-12 hours. Most controllers don't have that time during reconciliation season, so they skip the detailed review and trust the GL coding.

That trust costs money. Industry data suggests 3-8% of operating expense pools contain misclassified transactions. On a $2M expense base, that's $60,000-$160,000 in potential errors.

The solution isn't reviewing every transaction. It's reviewing the transactions most likely to be wrong.

The 30-Minute Checklist

Minutes 1-5: Large Transaction Scan

Pull all transactions over $10,000 from operating expense accounts. Sort by dollar amount descending.

For each transaction, ask one question: Is this a recurring operating expense or a one-time capital item?

Red flags:

  • Transactions over $25,000 in maintenance accounts (R&M, HVAC, plumbing, electrical)
  • Any transaction described as "replacement," "installation," or "upgrade"
  • Vendor names you don't recognize in regular maintenance accounts
  • Round-number invoices ($50,000, $75,000) — these are often project costs, not routine maintenance

A $45,000 "HVAC compressor replacement" in the HVAC maintenance account is likely CapEx. A $4,500 "HVAC quarterly maintenance" is OpEx. The GL account is the same — the nature of the expense is different.

Target: 15-20 transactions reviewed in 5 minutes. Catches: CapEx misclassification (the #1 dollar error).

Minutes 5-10: Year-Over-Year Category Comparison

Pull the trial balance for operating expense accounts. Compare each category to the prior year.

Flag any category where the variance exceeds 15%:

Category20242025VarianceAction
Janitorial$185,000$192,000+3.8%Normal — skip
Utilities$340,000$355,000+4.4%Normal — skip
R&M General$120,000$195,000+62.5%Investigate
Insurance$180,000$210,000+16.7%Verify — likely real premium increase
Security$95,000$88,000-7.4%Normal — skip
Landscaping$65,000$112,000+72.3%Investigate

For flagged categories, drill into the GL detail. The R&M increase might be a legitimate cost spike — or it might contain a $75,000 parking lot resurfacing project that should be CapEx. The landscaping increase might reflect a new contract — or it might include a $47,000 irrigation system installation.

Target: All expense categories scanned in 5 minutes. Catches: unusual activity that needs explanation.

Minutes 10-15: New GL Account Check

Pull the list of GL accounts that are active this year but weren't active last year (or vice versa).

New accounts that should be in the recovery pool but aren't mapped are a direct leakage source. The property added a new utility sub-account for EV charging stations — $18,000 in costs that never flow to tenants because the account isn't in the recovery pool.

Deleted accounts that were in the recovery pool should be investigated. Did the expense move to a different account? Or did the expense genuinely stop?

Target: 2-3 minutes to compare account lists. Catches: unmapped expenses (silent recovery leakage).

Minutes 15-20: Management Fee and Admin Verification

Pull the management fee GL account. Verify the total against the management agreement.

If the management fee is calculated as a percentage of gross revenue:

  • Confirm the revenue base used in the calculation
  • Verify the percentage matches the management agreement
  • Check that the fee is coded to the correct GL account (not split across multiple accounts)

Then check for corporate overhead or management company expenses that were posted to the property GL. Accounts to check: office supplies, corporate travel, employee benefits, and any account with transactions from the management company's corporate office.

Target: 5 minutes. Catches: management fee overcharges and non-recoverable corporate costs in the property GL.

Minutes 20-25: Insurance and Tax Bill Verification

Pull the insurance premium and property tax GL accounts. Verify against the actual bills.

For insurance: compare GL total to the policy declaration page. They should match within $500 (rounding and timing differences). If the GL shows $210,000 and the declaration shows $195,000, there's $15,000 of something else coded to the insurance account.

For property taxes: compare GL total to the tax bill. Watch for supplemental tax bills that arrived after the main bill, personal property tax mixed with real property tax, and special assessments that may or may not be recoverable.

Target: 5 minutes. Catches: non-insurance costs in the insurance account, tax bill discrepancies.

Minutes 25-30: Related-Party Transaction Scan

Search the GL for transactions with the property management company, the ownership entity, or any affiliated companies. These transactions attract scrutiny from tenant auditors.

Common issues:

  • Affiliated vendor rates above market (painting company owned by the PM company)
  • Inter-company charges without supporting invoices
  • Management company staff time charged as a direct expense (when it should be covered by the management fee)

Flag any related-party transaction over $5,000 for documentation. You don't need to resolve it now — just make sure you can explain it if a tenant auditor asks.

Target: 5 minutes. Catches: related-party transactions that need documentation before audit.

What to Do With Findings

After 30 minutes, you'll have a list of items to investigate. Prioritize by dollar amount:

  1. Over $25,000: Research immediately. Reclassify if CapEx. Adjust the recovery pool if needed.
  2. $5,000-$25,000: Research within the week. These affect the reconciliation but aren't urgent.
  3. Under $5,000: Note for review but don't delay reconciliation. The cost of investigating exceeds the billing impact.

This 30-minute review won't catch every error. But it systematically targets the error types with the largest dollar impact: CapEx misclassification, unmapped accounts, management fee errors, and related-party charges.

CapVeri automates this entire review. Upload your GL export and CapVeri flags every item on this checklist — plus pattern-based anomalies that a manual scan might miss.

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