There are certain financial reports you’ll need on a monthly basis, including the balance sheet, statement of income and expense, cash disbursements ledger, Bookstime and the accounts payable report. The following reports are necessary for understanding how much money is coming into and going out of your homeowners association’s accounts. It’s helpful to review the HOA financials from the previous year in order to prepare for the following year. Homeowners associations with high cash flows should get an annual audit by either a staff member of the homeowners association’s management company or a CPA. If you opt to hire a CPA, they will provide you with one of three reports. The association will decide which report they want before the CPA starts work.

How can management companies differentiate through their accounting practices?

Add every detail, no matter how small, so you have a more thorough insight and better decision-making. If you are having trouble preparing community financial statements, the professionals at CSM are standing by to answer all your questions. We have years of experience working with thousands of residents across the United States. Community Financials provides expert bookkeeping and financial reporting for HOAs, Condominiums, and POAs nationwide, ensuring fund security, transparency, and effective communication.

Bill Pay & Payroll Processing

Funds are accounted for in a centralized location, ensuring that employees can spend less time handling manual accounting functions. If you’re looking for HOA software to make self management of your HOA simpler, efficient, and accurate, you’ve come to the right place. Integrate MoneyMinder and Join It to automatically sync up your membership and payments. Membership payments are imported into your Join It bank account and Members are inserted into your MoneyMinder contacts seamlessly when they are created or updated.

Accounts Receivable: Track Homeowners and Renters

Set up an online store to collect homeowner payments via credit card or e-check. Using PayHOA as an HOA bookkeeping service can take these tasks off your volunteers’ plates so that they can manage your properties (and their lives). The right assistance from an outsourced bookkeeping service can make your members feel supported, confident, and free of burdensome tasks. The modified basis (also referred to as modified accrual basis) is a combination of the cash and accrual basis of finance management. In this method, revenues are recorded when hoa bookkeeping earned (just like accrual) but expenses are recorded when paid, rather than when incurred (just like cash basis).

Join thousands of successful HOAs and communities using our HOA software. Store and send forms, records, receipts, minutes, documents, and more. Bring accuracy and transparency to your Accounts Receivable and Accounts Payable. Repairs, marketing, and even travel to your properties can reduce your taxable income when properly documented. Treat security deposits as liabilities (money owed back to tenants), not income. This guide simplifies accounting concepts, defines the terms you’ll need to know, and breaks everything down into actionable steps—designed for those managing a maximum of 10 properties.

You’re in Great Company

This is because transactions are recorded at the time they occur and therefore the books are always up to date. The finance department will then get the bank statements and go over the deposits and checks. The finance department’s main goal is to maintain an accurate, consistent record of the association’s financial transactions.

Can homeowners mail paper checks to pay their dues?

• Newer HOAs or ones with more basic budgets can prepare one every month without much issue.
• Our online bill approval system requires two Board members (with their unique login) to review all invoices and approve them prior to payment.
• Treat security deposits as liabilities (money owed back to tenants), not income.
• Assets may include cash, amounts owed, remaining values on the insurance that’s unused, and liabilities.
• Management companies that have adopted modern, digital accounting practices can also integrate their financial systems with other HOA technology.

Keeping members in the dark only promotes mistrust and working with inadequate or no financial information can lead to dwindling reserves for community upkeep and new projects. In some states, it is a legal requirement for HOAs to maintain and submit regular financial statements. It is a good idea to keep detailed records anyways as they will be extremely beneficial for all other aspects of homeowner’s association management. Timely financial reports are a tool to control association funds. The comparative income and expense report, for instance, shows a variance of actual costs vs budgeted costs and is great for spotting expense irregularities.

What Our HOA Community is Talking About

Next up we’ll mail out a letter to all your vendors to change their billing address so invoices come to us. Then we will mail out a welcome letter to owners with payment options, our contact info and how owners can set up online access. We will start setting up your community in our software after we receive a signed agreement and our on-boarding checklist with your answers to questions like your tax ID, fiscal year end, etc.

The accountant should compare the amount in the operating fund with the bank statement. You’ll see the association’s assets minus the liabilities, which gives you the net worth. Assets may include cash, amounts retained earnings balance sheet owed, remaining values on the insurance that’s unused, and liabilities.