Producing Service Charge accounts each year for your clients is forever becoming a more rigorous and arduous process. With the increased regulatory demands and growing tenant scrutiny, property managers need to stay ahead of the curve. In addition, our data shows that roughly 50% of schemes/blocks have a calendar year end, which presents an organisational challenge in delivering these accounts before the six month publishing deadline.
As we look toward 2026, the pressure to deliver transparent, accurate, and compliant service charge accounts will only intensify.
In this article, we explore why planning ahead for 2026 is crucial, and how you can streamline your Service Charge process to assist with meeting these demands.
Why planning ahead for 2026 is crucial
Common challenges that hinder timely delivery
To properly plan for 2026, it’s important to understand the roadblocks property managers commonly encounter. The challenges may vary between properties and agents, but the themes are generally consistent.
We all know that we have a responsibility to publish service charge accounts to leaseholders within 6 months of the end of the financial year end. With 50% of scheme/blocks having a calendar year end this is a challenging workload peak that can easily drift out and lead to unfinished accounts. We all know that the later we deliver Service Charge Accounts to the leaseholders, the more chasing enquiries we get from block directors, which wastes more time.
Beginning the preparation of these Accounts now will help manage this workload and ensure service charge accounts are delivered in a timely fashion.
The risk of manual processes
Typically, manual and spreadsheet processes still dominate, however, these often introduce transcription and formula errors, which in turn leads to wasted effort. Therefore, planning now to remove as many of these tasks will pay dividends, whereas leaving until January already means there’s no time to look at such process improvements. Consider integrated solutions like those provided by Blocks Online, and even if you are using such a system, review the process support from the system to make sure you are optimising it’s use.
Supplier delays compound the issue
Delays can occur when waiting for Supplier invoices. Chasing for these invoices in January or February is too late, the process needs to start now to get suppliers on-side and providing the information you need.
Essential steps to streamline your Service Charge process
Conduct timely year-round bank account reconciliations
The core of everything is reconciling your financial records. Leaving reconciliations to the end of the service charge period or even monthly is usually a cause of errors and pressure. It is best to develop a daily reconciliation process for group bank accounts or weekly with block-by-block bank accounts. This reduces the chances of misallocations and prevents that common scenario of the transaction nobody can remember, so it cannot be allocated correctly and either sits there unreconciled or takes a lot of effort to track down.
Increase automation where possible
To reduce workloads, the more automation in terms of downloading bank transactions, the better.
We would recommend a special focus in December on resolving any lingering reconciliation items. Core property management tasks naturally quieten down during this period, so it’s a good time to help clear the decks for January.
Always remember that if you need help with bookkeeping this is a service that Cox Hinkins provides to the property management industry already and may be able to apply to help you get on top of your reconciliations.
Allocate ALL expenditure to schedules
We understand that as you are always busy, processing supplier invoices and thinking you’ll allocate to schedules later is always an easy decision to make. Unfortunately, this leads to issues later. At Cox Hinkins we often receive expenditure transactions that are not allocated to a schedule. We will more often than not make our best informed attempt to allocate the schedule to be helpful, however, we have to recognise this is an educated guess. The people who are best placed to know which schedule to allocate expenditure to are the property managers themselves.
Use December to complete allocations
So again, if possible, use December to start reviewing the end of year schemes to ensure all expenditure is allocated to schedules. In contrast to your internal finance team, who may introduce schedule errors when allocating expenditure to schedules, property managers should know the correct answer. Therefore, it’s good to take advantage of the quieter period.
A best practice is to take advantage of facilities from the likes of Blocks Online, which require Property Managers to allocate invoices to schedules before they can be approved for payment and/ or sets up rules to allocate chosen expenditure categories to particular schedules automatically. This ensures allocations are accurately completed in a timely manner.
If you can, make sure that all bank account transactions are reconciled and all expenditure is allocated to schedule early on. Having these 100% complete before submitting to the service charge reporting process means you will have excellent foundations for a good set of service charge accounts.
Plan Q1 like a military operation
Given that roughly 50% of accounts end on the calendar year, it presents a big challenge for most managing agents. We believe the key in the planning is to identify all the blocks/schemes that have calendar year ends (including the Quarter Date ones).Then identify the small and simple blocks/schemes and try to finalise these for submission to the accountant for mid to late January. Next, follow up with your larger complex blocks/schemes afterwards, as these typically have more late supplier invoices and the less accruals you need to have, the better.
Track progress closely
Like any plan, monitoring is key. Ensure your team get behind the plan and aim to have all block/schemes prepared and with the accountant before the end of March.
Automate the hand-off to your Service Charge Accountant
One of the best methods of removing manual errors, enhancing consistency and speeding up your workflow is automation.
Passing financial data around using spreadsheets and files often leads to transcription errors and time wasted when tracing what went wrong. The more you can automate the passing of information between yourselves and your accountant, the more time saved. Using an alternative to email is especially important in terms of data, as emails can be lost.
Cox Hinkins uses a Service Charge accounting package (SCOAP) that is directly linked to Blocks Online. This means that all financial data from a block/scheme is sent straight from Blocks Online to Cox Hinkins (or any Service Charge Accountant) and does not need loading or transcribing. Conversely, when the accounts are finalised, the data is sent back into Blocks Online, enabling it to automate some of the distribution tasks after the Service Charge accounts are finalised.
This automated hand-off also enables Blocks Online to show the status of your Service Charge accounts as they are being processed by the accountant. No more chasing to find out where the accounts are and allowing you toto plan ahead.
Improve supplier collaboration
Suppliers have a part to play in timely service charge accounting and delays in receiving invoices can increase the complexity in the reporting process. Enhancing teamwork using digital media helps with this issue. For example, creating automatic reminders to make sure that contractors make their payments on time, and uploading documents is more straight forward through the use of secure links. In the New Year especially, it is also worth sending a standard email to all your core suppliers asking for prompt invoicing of fees related to the previous year. This reduces the needs for Accruals, increasing the speed of accounts delivery and improves the accuracy of the final accounts.
Enhance transparency with a leaseholder portal
An exclusive portal sharing information with leaseholders and property owners helps alleviate the workload of your staff. Once service charge accounts are published, having a portal where leaseholders can review publishable financial data means less questions for your staff. Blocks Online clients have repeatedly found such transparency leads to the development of trust.
