Configuring Utilities
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      What is a Good Will Deduction (GWD)?

      The Good Will Deduction (GWD) in Ratio Utility Billing is a percentage discount applied to the total utility bill to offset billing and occupancy errors, ensuring fair and accurate cost distribution among residents.

      Good Will Deduction (GWD) for Ratio Utility Billing

      A Good Will Deduction (GWD) is a percentage of the total utility bill that is discounted and designed to offset billing and/or occupancy errors. This ensures fairness and accuracy in the utility billing process, providing a buffer for any discrepancies that may arise. The Livable Pro default deduction is 5%.We strongly advise against Property Owners/Managers passing through 100% of the utility bill to residents for several reasons.

      See also: What is a Common Area Deduction (CAD)?

      Purpose of GWD

      The primary purpose of the GWD is to address and correct potential errors in billing or occupancy records. These errors can occur due to various reasons, such as:

      • Inaccurate Meter Readings: Sometimes, utility meters may not record usage accurately, leading to incorrect billing amounts.
      • Occupancy Changes: Changes in occupancy, such as vacant units or unreported subleases, can affect the distribution of utility costs.
      • Billing Mistakes: Human or system errors in the billing process can result in incorrect charges to residents.

      How GWD is Calculated

      The calculation of the GWD involves the following steps:

      1. Determine the Total Utility Bill: Start with the total utility bill for the property, which includes all utility charges for the billing period.

      2. Apply the GWD Percentage: A predetermined GWD percentage is applied to the total utility bill. This percentage is usually set based on historical data, industry standards, or specific property management policies. For example, if the GWD is set at 2%, and the total utility bill is $10,000, the GWD amount would be $200.

      3. Deduct the GWD Amount: Subtract the GWD amount from the total utility bill to get the adjusted bill. Continuing with the example, the adjusted bill after applying a $200 GWD would be $9,800.

      4. Combine with CAD: Ensure that the sum of the Common Area Deduction (CAD) and any GWD does not exceed 100% of the total utility bill. This ensures that the deductions are kept within reasonable limits and do not lead to under-recovery of utility costs.

      Benefits of GWD

      Implementing a GWD in the Ratio Utility Billing System (RUBS) offers several benefits:

      • Enhanced Fairness: Residents are not unfairly charged for discrepancies that are beyond their control, leading to increased trust and satisfaction.
      • Error Mitigation: Helps mitigate the impact of billing and occupancy errors, ensuring that the utility billing process remains fair and accurate.
      • Flexibility: Provides property managers with a tool to adjust for unforeseen issues and maintain a balanced and transparent billing system.

      Conclusion

      The Good Will Deduction (GWD) is a valuable component of the Ratio Utility Billing System (RUBS) that helps offset potential billing and occupancy errors. By applying a percentage discount to the total utility bill, property managers can ensure a fair and accurate distribution of utility costs among residents, enhancing overall satisfaction and trust in the billing process.