How to Streamline Your HOA Financial Reporting
The first step in streamlining anything is to clean up and get organized.
Multiple users and many versions of similar files could be putting your association at risk. You’re chancing that reports and state-required financial statements may get prepared based on out-of-date information.
While one file may get updated, does the same data figure match within another file? These discrepancies could be problematic if the invalid information is used for future budgeting. You’ll also quickly lose the trust of the association members.
Even with processes in place, people make mistakes and mistakes can put your HOA at risk.
Use HOA Software to Handle Community Association Management Tasks
Eliminate inconsistencies and stop errors by using an application that brings everything under one umbrella.
If a figure gets changed in one area, it should automatically update across the board in real-time. No more worrying if the treasurer saved the latest version or not.
Instead of hopping from spreadsheet to spreadsheet to update numbers or collect needed information, everything is managed within one place. Not only does it make your task management more manageable, but you also reduce the risk of human error when you remove the manual process of updating spreadsheets, ensuring your data records are accurate.
Adopt Cloud-based Software to Improve HOA Financial Reporting
A system on the cloud helps to improve efficiency and collaboration. It gives board members and community managers more freedom and brings everything into one place. Software for your HOA, like TOPS [ONE] allows users to work from anywhere and on any device.
It’s also much more secure than sharing spreadsheets or using one login among an entire team. Privacy worries are at an all-time high for consumers, so offering an additional layer of protection should be well-received.
Customize Reports to Verify the Accuracy of HOA Accounting
The customizable, interactive reporting from TOPS [ONE] lets you easily zoom in on specifics that may not be detailed in your main financial statements.
For example, you could drill down into account payables to review what has been paid versus what is owed to particular vendors.
Another way to check for accuracy using reports is to compare expenses and income amounts monthly and annually. If a number is drastically different compared to the previous month or year, you may have a problem. It also could mean that an expense was recorded later or sooner than in the past.
Balance Your Financial Accounting Against Your Bank Accounts
If using a cash basis for accounting, the association can compare their bank account balances against their balance sheet.
Since accrual accounting is based on when funds are earned or incurred, not when they’re paid out, it would be highly unlikely for the two to match up – unless accounts payables and receivables are paid in full.
Delineate Specific Budget Categories for Tracking
Create a set of budget categories to keep data consistent. You don’t want board members creating new categories because they weren’t sure how to categorize an expense. Normalizing the data eliminates the need for someone to go in and make changes later.
Understand and Stay Current on Your State Laws
States hold varying regulations on financial reporting for HOAs.
HOA boards must understand their state’s laws to avoid unintentional penalties or legal action.
Occasionally, changes will arise from regulators, or you may face an outside audit. When working with spreadsheets that a designer created using formulas, it can be tricky to change them. Luckily with a program created for property management, reports are easily tweaked to include the requested information.
Automate Reporting for Your HOA to Free up Time
Automating the creation of reports and the process of sending them out, can save a lot of time. Instead of setting a reminder to send out financial statements to the HOA president and board members before meetings, you can set up an automation to handle it.
Streamline Your HOA Financial Reporting with TOPS [ONE]
Request a free consultation to learn more about our HOA software and get your property management questions answered. You can talk to an expert in the field who can give you advice that can be applied immediately. Contact us now!
Download a FREE eBook “CAM Accounting 101”!
In this download, this eBook helps provide a basic understanding of the unique aspects of Community Association Accounting, and gives a general overview of standard CAM accounting practices.
Here’s what you’ll learn:
- Provide Board members with the monthly financial reports they need to govern their association
- Which accounting method to use for your association management.
- Understand the accounting cycle for community management
- Identify the unique aspects of CAM accounting.
- How to set up your General Ledger.
This is the resource you’ve been waiting for.