Management of an HOA (Homeowners Association) is not an easy task. Although associations aim to perform their responsibilities and are able to do so, they often lack key factors in their performance, particularly in the field of HOA financial management. This often results in inefficient supervision and loss of costly resources. Here’s how an HOA management company can help your association handle its finances and protect your money.
Assisting Your Community with HOA Financial Management
As with all HOAs, your board is made up of volunteers from members of the community — members that are full-time parents and have 9-to-5 jobs. Even though you would like to dedicate all of your time servicing the HOA board, it is likely difficult with so many things on your plate. This is where HOA management companies come in.
Through an HOA financial manager, HOA management companies can assist community associations by providing them with services for the professional management of their HOA finances. Every homeowners association that has trouble keeping track of its financial resources should consider hiring an HOA management company for the task. After all, not everyone has the time or level of expertise required to carry out such a crucial task.
An HOA management company can provide HOAs with all or most of the following services:
1. Allocating Resources Efficiently
While you might think it is a piece of cake, the proper allocation of resources is no small feat. The finances of an HOA need to be allocated in a profitable and efficient way. However, in most cases, this aim is not achieved successfully, resulting in idle funds or an altogether lack of funding.
To avoid this, you must consider partnering with an HOA management company. With expert and professional services, HOA management companies can help the association in maintaining their resources in the best way possible, allowing for their optimization.
2. Clear and Accurate Records of Bookkeeping
Keeping clear and well-defined accounts is necessary for every organization, including a homeowners association. But, many HOAs are unable to track their resources in an accurate manner, failing to even use the best accounting method. This can result in discrepancies between income and expenditures.
Working knowledge of accounting is required to ensure correct recording and good HOA financial reporting. Poor accounting also makes it difficult to determine where the resources of the association are being utilized, and thus, maximum outcomes cannot be achieved due to inaccurate bookkeeping.
HOA accounting firms can help HOAs by offering their exceptional accounting services, which will enable the association to keep track of its financial resources accurately.
3. Organizing Tasks with Expertise and Experience
An HOA works for the benefit of the overall community. As a result, there are a number of tasks that are scheduled to be performed by the association. These tasks need to be properly prioritized and organized so that the most important matters are managed before the rest.
An inefficient and inappropriate mode of organizing can lead to a lot of wasted time and resources for the association. To organize their responsibilities in the most suitable manner, they need to take assistance from HOA management companies. These management companies have years of experience in the proper organization and allocation of time and resources and can guide the HOA as to the most favorable choices.
4. Reducing Fines with the Help of Legally Approved Practices
When you are a full-time parent working a full-time job, you rarely have the time or energy for research. This often results in bad practices that do not comply with the law, usually leading to penalties for your community association.
An HOA management company uses legally approved practices for HOA fiscal management and guides the association with regard to various legal financial matters. This is so that it does not have to incur hefty fines and penalties due to negligence.
5. Use of Modern Software
In the past, accounting and financial management used to involve nothing but pens and papers, maybe typewriters, and the occasional computer. Everything was done manually, with only the presence of calculators to aid you.
With the advancement of technology came the introduction of HOA financial management software.
Unfortunately, not everyone is accustomed to using this type of software. Moreover, without some knowledge of accounting, it is nearly impossible to check whether or not there are any errors. Due to their long-running experience in the field, HOA management companies are more familiar with modern software, giving you an edge when it comes to HOA financial management.
While you can choose to do things the old-fashioned way, using financial management software gives a leg up on the traditional pen-and-paper due to its efficiency and accuracy. In addition to this, HOA management companies usually have other types of software at their disposal.
6. Audits Made Easy
If you take a look at your governing documents, particularly the CC&Rs, you will likely find a stipulation requiring your HOA to conduct an annual financial audit. What is an audit? It is a comprehensive review of your organization’s finances and accounts.
It involves examining all financial documents and records in an effort to determine the accuracy of your HOA’s financial statements and assess its overall financial health.
Audits usually strike fear into the hearts of most HOA boards due to the complicated (and often expensive) nature of the act. It is usually conducted by a third party in the form of a Certified Public Accountant (CPA). By partnering with an HOA management company, your HOA has better access to these types of professionals.
Even if your HOA does not require annual audits, it is nevertheless a good idea to adopt the practice. Your state may also have laws in place regarding audits. For instance, according to the North Carolina Planned Community Act GS § 47F-3-118, a majority vote of the board or lot owners could trigger an audit.
Hire an HOA Management Company Today
As you can see, there are many ways an HOA management company can help you protect your HOA finances. Services related to HOA financial management are just the tip of the iceberg. With ample experience and a high level of expertise, these companies can also assist you with other aspects of running an association.
So, if your HOA is in need of professional assistance — financial or otherwise — partner with an HOA management company like us today. We are just one call away!
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