The Balance Sheet will also include Accounts Payable, Prepaid Assessments, Assessments Receivable, and totals for each that agree with detailed reports for easier management of the association’s finances. HOA Accounting is the tracking and recording of all financial activity for the purpose of reporting. Keeping a record of your association’s cash flow provides you with a thorough understanding of where you stand financially. Yet, accounting for homeowners associations isn’t just writing down your expenses in a notebook.

Make sure to accurately evaluate the maintenance and repair costs and utility expenses by looking at what it cost you last year. Look over your reserve funds to be sure you have enough set aside for unexpected expenditures. Once you have all of this information, you can calculate the probable costs for your budget. For starters, if there is consistent record keeping, association directors can look back on previous financial years to identify patterns that could affect the current budget and adjust accordingly. If detailed records are not kept, it can be near-impossible to keep track of delinquent dues or know how much money is available to budget for community maintenance and new projects. If you are having trouble preparing community financial statements, the professionals at CSM are standing by to answer all your questions.

HOA Accounting Software

It is essential to work with a qualified accountant or financial advisor when you decide which method works best for your organization. The best HOA accounting software also will feature a secure, reliable online payment system that allows members or residents to make payments easily. And rather than rely on manual data entries and outdated processes, HOA accounting software enables HOAs to streamline their financials with automated billing, collections, payments, and reconciliation. Does your HOA need to keep track of bills, dues payments, and maintenance costs? If so, then you likely need a specialized accounting software system or HOA website designed specifically for Homeowners Associations.

• Because expenses follow a cash basis, monthly reports may mislead associations.
• Automation also can save time by eliminating manual data entry, which can help HOAs leadership teams focus on other areas of the business.
• This frees up the board to focus on taking care of important issues in the community while maintaining costs and reducing overhead.
• The board of directors makes decisions for the association and then hires a management company to implement their vision.

Our HOA software automatically writes invoices and payments to your ledger, making generating reports for unpaid dues and fees seamless. Collecting money for reserve funds should be built into the fee structure for residents of the HOA. In other words, the monthly fee that’s charged to residents should include enough money for regular maintenance and services, as well as some money to set aside for the reserve fund. The best accounting method for HOAs will depend on their needs, such as budgeting, bookkeeping complexity, and services provided.

What Is HOA Accounting Software?

Besides the mailed statements and late letters, written correspondence to owners in the form of Annual meeting notices are reviewed and approved by a Board member prior to sending. Our online bill approval system requires two Board members (with their unique login) hoa accounting to review all invoices and approve them prior to payment. By overcoming the top 5 issues that self-managed communities encounter you can have a great experience that meets or exceeds that of communities that pay for full management at a fraction of the cost.

This job can be complicated by inaccurate or incomplete financial reports. Therefore, it’s important for all board members to know how to understand and analyze financial reports. This way, they can prepare the association for maintenance, repairs, homeowner bankruptcy, and even financial dishonesty.

Take Your Next Step with HOA Accounting Software

These companies have the necessary expertise and resources to handle all aspects of HOA accounting efficiently. CINC Systems’ community management software includes a dedicated violations module with features to help meet needs specific to an HOA condo manager. Maintain violation documents and photographs in one easy-to-access location and automate repetitive tasks like fee calculations and homeowner notifications.

To ensure accurate financial tracking, HOA accounting software should include an integrated reporting feature that generates detailed reports of income and expenses. This feature gives you easy ways to monitor your organization’s financial health and make informed decisions. According to Civil Code Section 5500(c), the Board of Directors must review the current year’s actual expenses and revenues compared to the year’s budget at least quarterly.