From there, you can investigate further or ask your HOA management company what went wrong. 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. A majority of experts and accountants agree that the Accrual Basis is the best accounting method to use.
Is there a difference between an accountant and a bookkeeper?
Similarly, you will only record expenses once you actually pay for them as opposed to when you incur them. Using this method, you will not use any payable account titles such as Accounts Payable or Notes Payable. Join our blog newsletter to stay up to date on property management industry insights. Typically, audits take place at least once a year, although each association’s governing documents may have different requirements. If your association hasn’t undergone a financial audit in some time, you should schedule one as soon as you can. To avoid falling behind, set a regular schedule for entering transactions.
Real-time Financial Reporting
Audits can be expensive, usually costing between $4,000 to $6,000, which is why many HOAs prefer to conduct yearly financial reviews instead.
#1: Establish HOA Accounting Standards with Your Boards
- Bring your HOA into the modern era by investing in software specifically designed to fit HOA needs, and you’ll find out how much easier life can be.
- Working with different HOAs and navigating each state’s unique laws has helped us to gather a wealth of knowledge.
- HOA managers can save time and resources by automating and centralizing information with the program.
- Not only does it provide a more accurate financial picture, it’s also compliant with Generally Accepted Accounting Principles (GAAP) and is even legally required by some states.
- PayHOA is a secure, cloud-based payment processing tool made with HOAs in mind.
However, bookkeepers, especially those with HOA experience, will help prevent these situations from occurring. Most of us can successfully keep track of our personal finances, but it’s not something we get excited about. Now imagine trying to document income and expenses for a multi-million-dollar association. It’s our goal to ensure all board members have the peace of mind that the community’s books get the attention they need.
- This is because the Accrual method gives you a more accurate picture of your financial situation.
- It’s also a good idea to assign someone, usually the HOA manager, to review all invoices, deposits, and bank statements.
- This program lets HOA managers track member payments, community upkeep, member contact, and financial reporting.
- Maintain a general ledger that contains detailed information for every transaction.
- Users of ProMas can produce financial statements, monitor expenditures and income, and design unique reports thanks to the software’s flexible reporting and accounting features.
Start your 30-day free PayHOA trial today
HOA finances should be accessible to board members without the need to request a meeting or spend hours on the phone. Consider our bookkeeping team as an extension of your HOA management team. HOA Accounting Services is a member and strong supporter of the Executive Council of Homeowners (ECHO) and Community Association Institute (CAI). We serve hundreds of Board members and a substantial number of Self Managed Associations, Management firms and petty cash independent property managers. HOA Accounting understands the accounting and bookkeeping needs of the association Board of Directors, their Association Managers and their members.
Many associations turn to expensive management companies to shoulder Certified Bookkeeper some of this load. HOA software can relieve a great deal of stress, and outsourcing HOA bookkeeping services to PayHOA can be a game changer for a self-managed HOA. The income statement, also known as the profit and loss statement, hoa financial statements, shows the revenues and expenses of the HOA over a specific period.
- A modified method is deemed appropriate for preparing interim financial reports for the HOA as you wait to make all payments for expenses that the HOA has incurred.
- No organization can work smoothly without the proper management of its financials.
- However, the HOA must be comfortable keeping and sharing electronic documents.
- Contact us today to set up an exploratory call with our Accounting Department and retake control of your finances, maintain your association’s stability, and free your volunteers’ time.
- Rest assured that your sensitive information is protected within a robust and reliable system.
- After all, your board has a duty to protect your HOA finances and assets.
Key Features of Smartwebs HOA Accounting Software
Using the Cash Basis of Accounting, you must record income and expenses upon the exchange of money. This means you will only record income once you actually receive the payment as opposed to when you earn it. HOA accounting is perhaps one of the most demanding facets of managing a homeowners association. The disadvantage of this method is that it can be difficult to keep track of all the transactions for which payment is pending to the HOA or to which the HOA owes money.
Driving Efficiency at Scale: Your HOA Community Management
Densely populated high rise condominiums have always been budget conscious. FirstService Residential, one of the top management companies in North America, has cared for 340 On The… Bookkeeping software allows the board to remain in control of their numbers, and creates a structured system that new board members will be able to duplicate.
Plus, our focus on flexibility means you only pay for the bookkeeping services we provide. Each community has different needs depending on size, location, governance, and structure. Some may only need light bookkeeping support while others require comprehensive financial management.