What is Billing Cycle?
The recurring schedule on which CAM estimates and other tenant charges are billed, typically monthly, with annual reconciliation.
Definition
The billing cycle is the recurring schedule on which CAM estimates and other tenant charges are invoiced. Most commercial leases specify monthly billing of estimated CAM charges (one-twelfth of the annual estimate), with an annual reconciliation that compares total estimated charges collected against actual expenses incurred. Some leases allow quarterly billing or other intervals. The billing cycle affects cash flow for both landlords and tenants — monthly billing provides steadier cash flow but requires accurate annual estimates to minimize reconciliation variances. Mid-year estimate adjustments may be permitted under some leases when actual expenses are trending significantly above or below the original estimate. Property controllers must ensure billing system configurations match the cycle defined in each tenant's lease.
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