Whether an HOA is made up of ten units or ten thousand units, it could be beneficial to hire a management company to ensure that everything is being run as efficiently and effectively as possible. When looking into property management companies, it is important to look for a company with a strong financial background. The entire community association becomes ineffective if there is improper handling of finances. https://www.bookstime.com/ When an elected community member self prepares financial statements, make sure that there is a backup of all financial records. Most importantly, having detailed financial statements readily available to all HOA members can promote transparency between the board and the community. If the homeowners can see what their money is going towards, they will be more agreeable and open with the board of directors.

HOA Bookkeeping: An Overview

Keep in mind that board members change every few years, and if there are no structured processes in place, the new treasurer may document finances in a different way than the former treasurer. Though the numbers may still be accurate, it becomes more challenging to compare the numbers and create educated budgets for the future. Some HOAs are required to perform an annual audit as stated in their CC&Rs. Whether it’s required or not, an annual audit is a good practice to have as it helps confirm your HOA’s financial health.

Balance Sheet

You might end up overspending and making poor financial decisions as a result of inaccurate records. Experience the difference with our professional financial services designed specifically for HOAs and condo associations. Once you decide that you’re ready to use FreshBooks as your accounting software, you can choose from one of our plans that start at just $15 a month.

• It will list these transactions in numerical order and date of occurrence.
• Members must go back and find out what numbers are missing or incorrect in order to produce an accurate financial picture.
• They also promote transparency between the board and members or it can also be a law requirement.
• Keep in mind that there are certain bankruptcy laws that protect bankrupt homeowners.
• The Balance Sheet is also where you can find the Accounts Payable and Accounts Receivable statements.
• The first place to start your HOA accounting transition process is for your Board to have reviewed our proposal and our service agreement, had your questions answered and decided to work with us.

Recommended Services

• Yet, HOA accounting remains an integral part of your job as an HOA board member.
• Now you can access your HOAs accounting information online from anywhere with the FreshBooks Cloud Accounting app.
• An HOA balance sheet will list items like insurance payments, bills, resident fees, petty cash, compounded interest, and any equity in the HOA’s reserve accounts.
• Preparation of annual budget to be approved by Board and distributed to homeowners.
• This way, the bill hits their inbox and the money hits your account in a matter of minutes.
• We have years of experience working with thousands of residents across the United States.

This means you can access your company’s data from any device at any time. When you hear the word “audit,” most people immediately think of the IRS. But an audit isn’t always initiated because of taxes and it isn’t always a huge headache. In fact, an annual audit can ensure an HOA is in good financial standing for years to come.

Connect with us and learn how a partnership could benefit your association. 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. As a board member you have a fiduciary responsibility to exercise due care and diligence when overseeing the community and its funds. The following four condo / HOA financial reports are vital tools for protection of association assets, control and planning.

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 hoa accounting 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. Community Financials improves real control for a community Board.

PayHOA’s Bookkeeping Service

The Complete Guide to HOA Accounting

• However, bookkeepers, especially those with HOA experience, will help prevent these situations from occurring.
• The Accounts Payable is a statement that lists all the unpaid expenses of the association.
• PayHOA is the single portal where you can connect directly with the needs of your homeowners.
• You might end up overspending and making poor financial decisions as a result of inaccurate records.
• Plus, it’s also the only method that conforms with the Generally Accepted Accounting Principles (GAAP).
• There’s no shame in asking for help, especially when it comes to a subject as difficult and confusing as accounting.