How To Improve The Financial Stability of Your Community Association
When it comes to having a homeowners association that runs smoothly and is proactive in their planning and financial tracking things can be great. However, by not having proper systems in place or not having someone vigilantly keeping files and records in order things can go south, fast.
However, more associations are learning about the benefits of having an HOA manager that oversees the vital aspects of keeping an association running smoothly. Although it may not seem like “much work,” with state and local regulations of how certain aspects of homeowners associations should run and documents to be provided, the daily to-do’s of an HOA can add up fast.
Improve HOA Financial Records
Currently, there are three different types of financial systems that an HOA can use. Each has its pros and cons, but overall the importance is consistency and not letting tasks get piled up.
Although with Accrual and Cash financial systems that most homeowners associations use, most management companies suggest sticking to an Accrual Accounting method. This helps in keeping records of finances up to date and correct.
When the time of year comes around, typically 30 days before the end of the fiscal year, having these records in order can save hours, if not days, in the preparation and budgeting of the HOA.
Improve HOA Board Member Decisions
When it comes time to vote for changes to the HOA or budgets, having accurate records is vital. With only one transaction not accounted for the entire plan and expectation of the association could be knocked off and certain decisions would be changed.
Sadly, many homeowners associations find this out the hard way and reap the repercussions of not keeping records active and up to date.
Help With HOA Legal Issues
It could be the process and steps on bringing a violation to a community member’s attention, or attempting to get fees that were late or missed. Either way, there are legal aspects of an HOA that an experienced manager will know the answer or the best attorney to contact and have issues resolved.
Although it’s not an overabundance of legal issues, having the previous experience and contacts can make it like another day.
Be Honest About HOA Finances
One of the most frustrating things for anyone is planning, especially finances, and having unexpected expenses. If financial records are not kept up to date or audited frequently this can easily become the case.
If an association is running on a Cash-Based financial system there can be even more of a chance of things not adding up or being incorrect. HOAs that take one an Accrual Accounting method has much more control, knowledge, and records of the financial expenditures or income. Either way, the records are continually updated and this allows board members and community members to see any issues and plan for possible unexpected costs.
Choose a Bank That Works With Associations
One thing most people may not realize is that not all banks are used to working with HOAs. With some of the special needs that an HOA needs with their finances and keeping track of deposits and checks, a bank catering to these associations is vital.
One common scenario is for people paying their HOA dues and using a coupon. Commonly, the member forgot to put the coupon in the envelope that was sent to the P.O. Box or bank. A bank that is experienced with homeowners associations will notate that the coupon was missing in the deposit and alert the HOA.
If a typical bank was used it would be on the staff of the HOA to catch why the fees were short, and who to contact to get the appropriate coupon.
Although it may seem small, having this extra help in HOA finances can make a huge difference.
Keep The Community Involved
There’s nothing worse than an HOA that doesn’t seem to be there. Being active in the community and having planned events can help even with finances.
When community members are happy and seeing their money put to use, even in dire needs there will be more understanding in getting reserves back up or paying for an unexpected expense.
Ready For an HOA Manager To Stabilize Your Community Association Finance?
Give our team here a call and we will gladly answer any questions you may have. We, Clark Simson Miller, are always excited to guide clients, assess their needs, and set a plan into action to ensure the most efficient and cost-effective HOA in the area.