HOA Bookkeeping

hoa bookkeeping

Proper bookkeeping ensures that each financial transaction is properly categorized and recorded, helping the retained earnings balance sheet HOA avoid filing errors. We offer a comprehensive range of financial services tailored specifically to meet the unique needs of your community. Our accountants have worked with the top accounting firms in the world and have years of experience working in HOA management.

hoa bookkeeping

Up-To-Date Reporting

  • We selected one of the few national banks that specializes in HOAs and Condo banking to work with.
  • Community members can inspect these records to verify, with their own eyes, how the community spends its funds.
  • That means not letting a single person have control over every financial department.
  • It depends on your state laws and what your governing documents say.
  • It helps in determining whether the association is operating at a profit or loss.

Timely reports also help them effectively allocate funds virtual accountant for projects and maintenance. If you’re on the hunt for an HOA management company, our online directory lists the best ones by location. Understand their situation and never reveal the status of their financial health to other homeowners in the community. It’s also not recommended to restrict their access to amenities or shut off their utilities during a trying period in their life. HOA accounting can be very confusing — enough to make you use the wrong accounts when recording revenue and expenses. Far too many associations have made the mistake of deducting from their operating fund when they meant to deduct money from their reserve fund.

hoa bookkeeping

HOA bookkeeping services

This detailed guide will shed light on the basics of HOA accounting, highlighting its importance and offering insights into the essential financial statements used in this process. Smaller, self-managed associations may have an elected treasurer, financial officer, or president that is responsible for compiling financial documents. In such cases, it is a good idea to use a professional accountant to ensure that HOA accounting statements are prepared correctly before releasing them to board and community members.

Does Every HOA Require a Bookkeeper and Accountant?

  • You can have peace of mind knowing our world-class accountants are taking care of your monthly HOA bookkeeping services.
  • Proper HOA accounting ensures the financial health and sustainability of the association.
  • Being a member of an HOA board means you’re involved in homeowners association accounting.
  • These financial reports include the balance sheet, income statement (or profit and loss statement), and cash flow statement.
  • Understanding the laws special to your state will save you a lot of time and trouble.

Do you currently self-manage your condo community or homeowners’ association? Hiring Condo & HOA self-management support services will reduce the time required to be a Board member. When the Board does all the financial management work by themselves, it gives an illusion of better control than having an outside company do the financial management – but it is just that – an illusion.

hoa bookkeeping

The board can quickly adjust the budget — whether it’s by increasing revenue sources, managing cash flow, or reducing expenses — to ensure the community’s financial stability. Whether you need bookkeeping for small HOAs or significant associations, professional bookkeeping services will help you monitor your finances regularly. Doing so can reduce the risk of financial errors if you manage your books less frequently.

  • Of course, not all information needs to be publicly accessible, but you should include everything that can be included.
  • Starting with a bookkeeping service may be wise to ensure basic financial tasks are managed appropriately.
  • It tells where the association stands with their asset, liability and reserves at a particular point in time.
  • HOA accounting is probably one of the most complex, and most important, responsibilities of the association board.
  • Plus, it’s also the only method that conforms with the Generally Accepted Accounting Principles (GAAP).
  • Doing so can reduce the risk of financial errors if you manage your books less frequently.

Break down your expense accounts into more specific accounts such as “Legal Fees” and “Maintenance Supplies.” In doing so, you can more accurately track where your HOA’s money is going. Lastly, the cash disbursements ledger lists down all of the checks your association has written and issued for the period specified. Otherwise known as a check register, this report consists of information such as the check’s recipient, the check date, and a description of the expense. It should also outline the check numbers, chart of accounts numbers, and any related invoice numbers. Homeowners associations are subject to taxes like other corporations.

hoa bookkeeping

Next, the timing for notification depends on your current management agreement – has it expired, is it ending at the end of the month? If it is mid-term, you’ll want to look at the termination paragraph of the contract. The board needs to review this at every board meeting to see what action needs to be taken at certain late dates (30, 60 days), such as sending a demand letter or turning the account over to a collection attorney or agency. For a smaller community this can be all that is needed along with a willing volunteer to handle the accounting.

Tools and Solutions for HOA Board Members

Choosing between cash basis and accrual basis of accounting is a critical decision for an HOA. The choice will depend on various factors, including the size of the association, the complexity of financial transactions, and statutory requirements. On average, HOA management companies charge a monthly fee ranging from $300 to $1,000 for accounting services, depending on the size and complexity of the hoa bookkeeping accounts payable by the association. Hire a company such as CSM to provide financial management assistance. It also gives community members peace of mind when there is accurate and efficient management of finances.

hoa bookkeeping

Each month, you’ll receive flawless financial statements and reports that give you a clear picture of how your business is performing. REA pairs its HOA accounting services prowess with your software’s detailed reporting to deliver comprehensive Trust Compliance Verification services. These remote financial management and administrative services handle over 55% of the work of operating a community, so you can rest easy knowing that your HOA or Condo community is taken care of. The comparative income and expense report, for instance, shows a variance of actual costs vs budgeted costs and is great for spotting expense irregularities. Moving from manual invoice management to an online software will help with transparency, risk management and error reduction.