Recoverability Gap Calculator

Recoverable expenses are often under-billed. This calculator sizes the recovery gap.

Total opex

Recoverable opex

Billed recoveries

Paid recoveries

Total recoverability gap

$90,000

Under-billing gap

$50,000

Collection gap

$40,000

How the math works

Gap = (recoverable − billed) + (billed − paid). Identifies under-billing vs collection issues.

Distinguish under-billing (process) from collection (credit) gaps. Each requires a different fix: process for billing, collections policy for payment.

How to Use

Enter total operating expenses.
Enter recoverable expenses.
Enter billed recoveries.
Enter paid recoveries.
Read recoverability gap.

Frequently Asked Questions

Typical gap?

Well-run portfolios recover 92-98% of billable expenses. Gap arises from tenant disputes, administrative errors, base-year shifts, caps that understate actual cost.

Recovering the gap?

Year-end recovery reconciliation usually captures 50-75% of gap. Remainder stuck in dispute or uncollectible. Track true recovery % on rolling basis to benchmark improvement.

Gap reduction strategy?

Mid-year estimate updates. Quarterly CAM invoicing (vs. annual true-up). Clear lease language on recoverability scope. Tenant-friendly ratio method disclosure. Audit-ready expense documentation.

When does a lender negotiate vs foreclose?

Lenders calculate their net recovery from foreclosure (asset value minus legal, time, and sale costs) and compare to any workout proposal. If your offer nets the lender more than foreclosure, and you present it with clear sources of capital, most lenders will engage. Bring a credible sponsor, documented sources, and a timeline — vague asks get declined. Build the relationship before distress, not after.