Preparing for Budget Season
With the start of the new year comes a lot of future planning for community managers.
This means taking a hard look at your financials and determining how you will budget for the new year. Your annual budget effects all aspects of your community. How much will you spend on the community, staff, projects, and more? This affects all of your financial planning. There is a lot to keep in mind when determining your yearly financial spend. Here are 5 things you will need to consider when budgeting for 2021.
Determine Your Yearly Goals
Before you build a budget, you should clearly define what your goals are for the new year.
How much profit you want to see? How many homes do you want to fill? How much resident engagement do you want provided? These questions and others are something property managers should consider before planning a budget. This gives you a better idea of what your finances will look like and where your priorities are. This helps you build a budget built for your community and your financial situation.
How Much Revenue Will You Generate?
In business, revenue drives growth.
Before each year community managers should take a hard look at their financial records and accounting to properly budget for projected revenue. This helps planning for your spending on community projects, paying vendors, and more. It also allows you to adjust later in the year depending on where you are tracking for revenue growth. Increasing revenue allows you to spend more on community improvements and updates. However, careful planning is needed to ensure revenue growth.
Look at Historical Financial Numbers
The best way to determine how much you have to budget is by looking at your communities past yearly numbers.
With TOPS [ONE], you get our advanced accounting so it’s easy to look up your financial records and see where there is room for improvement. This can comeback to benefit your community through smarter spending and planning. You can find areas for growth or find where to cut wasteful spending and move that money elsewhere. TOPS also offers a strong reporting platform to help you find the best financial solutions and present them to your board.
Determine Community Projects and Vendor Fees
One of the biggest expenditures for communities is money spent on vendors and other outsourced business.
Using third party vendors is common for community associations, and they can have a major impact on your budget. With TOPS [ONE], we have a new feature called VendorAlly to automate the manual tasks of AP. Our VendorAlly feature allows community managers to easily pay vendors and keep track of vendor expenses. All payments are made digitally so your accounting is easy to update, and your budget is easy to build. This also helps you plan out any community projects your association decides to move forward on.
Improve Collections Process
The last piece of advice we have for your 2021 budgeting, is to fine-tune your collections process.
Reduced delinquencies have several positive effects on your community. It leads to increased revenue, more accurate accounting, and better relationships with residents. Delinquent payments are perhaps the last thing a community manager wants to handle, but they are important to take care of, so they don’t cause issues between your board and residents. TOPS owner portals and online payments help prevent delinquent payments and keep your community accounting accurate.
Download your FREE CAM Budget Survival Guide!
This eBook provides CAM professionals with all of the tools, tips and tricks you need to not just survive, but thrive during budget season.
You will also gain access to all of the budgeting tools and worksheets we have developed to help you survive your own budget journey.
Here’s what you can learn:
- How to budget for future projects, even when you don’t have a contractor yet.
- How to determine what monthly assessment amounts should be.
- How to develop a community operating plan.
- How to accurately predict future expenses.
This is the resource you’ve been waiting for.