Identifying Costs

Identifying the services in your budget and splitting them into these two categories will give you a basis to start adding costs into your budget. It’s, generally speaking, easier to locate and enter the fixed costs, you will find these within a contract or can negotiate new terms with the supplier to lock in your budget price.

You might find that some services have an element of both fixed and variable costs. You should consider if it is therefore worth creating two budget items. For example you may have a fixed Lift Maintenance contract but some repairs fall outside of the scope of the contract. The contract price is fixed but the repairs are variable.

Fixed costs are far better to work within a budget. They are easier to locate, easier to understand and require less monitoring through the year. However, not all services lend themselves to fixed costs and they may possibly come at a higher premium. In any case, it’s a useful exercise to see where you could better utilise fixed costs in a service charge budget.