HOA Accounting in Charlotte NC
Charlotte Homeowners Associations (HOA) and its board members are in the driver’s seat when it comes to guarding the assets of their community. Smart accounting and managing of funds is as big a part of that duty as any.
HOA board members have the responsibility of planning the economic development of the association. In accounting, the name of the game is balancing the budget to ensure that operating and reserve funds are correctly maintained to protect the investments of all community members.
HOA’s need a comprehensive strategy, to guarantee their financial future is secure. Financial obligations can include maintenance, repairs, and bankruptcy. Most states regulate that you use one of three basis of accounting.
Standard accounting method records transactions when money exchanges are made between two parties. Revenues are reported when they are received, and all expenses are noted when paid, not when they are incurred. With cash basis, sums for Accounts Payable, fees receivable, and prepaid estimates are not reported on the HOA’s balance sheet.
Accrual Basis is recognized as the superior method of accounting for your HOA due to the fact that it provides an overall picture of the financial health and stability of your organization.
Modified Accrual Basis
Modified Accrual is a mixture of Accrual and Cash Basis methods. With this HOA accounting standard values for Prepaid Assessments and Assessments Receivable will be the same on the balance sheet, but the amount of the unpaid invoices in the Accounts Payable Report would not be on the Balance Sheet. Those expenses are listed on the Cash Basis.
Need Accounting for your HOA?
Cedar Management Group can provide the best solutions to help your community. To see how Cedar can better your community, please contact us online or by phone at 877-252-3327.