BALANCING MONTHLY HOA FINANCIAL REPORTS for Budget Season

BALANCING MONTHLY HOA FINANCIAL REPORTS 1. RECONCILE YOUR BANK ACCOUNTS It’s important to correspond your community association’s bank statements to your accounting ledgers. This includes incoming receivables and outgoing payables. Once you have confirmed that there is a match in your accounting system for each item on the bank’s statement, check for any oddities. If there are any discrepancies, make sure to attach a printout of your reconciliation report to your bank statement.   2. LIST DELINQUENT OWNERS AND OUTSTANDING PAYABLES When you’ve established your income for the month, you need to focus on what’s missing. This will usually come in the form of a delinquency report that will list homeowners who have not paid their dues for the month. You will also need a list of outstanding payables, or checks that have been written against the account but have not yet cleared.   3. PRODUCE A BALANCE SHEET AND PROFIT AND LOSS STATEMENT The balance sheet will list the community’s assets and liabilities. All you have to do is compare your owner balances and receipts against the bottom line of the receivable section on your balance sheet. You will also need to produce a Profit and Loss Statement (Income/Expense Statement). It must correspond with your balance sheet.   WHAT SHOULD YOU BE CHECKING FOR? Confirm that the Balance Sheet is in balance. Examine any negative balances on the Balance Sheet and Income Statement. Ensure that the Year-to-Date Current Year Net Income/Loss on the Income Statement corresponds with the Balance Sheet’s Current Year Net Income/Loss. Ensure that the Balance Sheet Reserve Accounts listed under Liabilities & Equity Section corresponds with the Reserve Accounts listed under the Asset Section. Assess any big differences between budgeted and actual figures on the Income Statement. If everything corresponds as expected, you are ready to turn in your monthly HOA financial reports to the Board!   HOA FINANCIAL REPORTS Monthly HOA financial reports are required by the Board every accounting cycle, whether it be quarterly or biannually. There is a ton of information out there for board members to help them understand how to state questions to ensure that HOA financial reports are correct. However, some members find it difficult to know which questions to ask in order to make sure everything is correct before giving it to the Board. Snap Collections is here to offer you advice and a checklist to ensure pristine HOA financial reports each month.  ...