Managing your own finances can be a stressful issue. That feeling can get multiplied when you’re managing a business funded by tens or even hundreds of homeowners. Working with HOAs and community associations throughout Georgia, we’ve seen our share of stressful HOA situations. But we’ve also seen what successful managers do to stay on top of their budgets and keep the communities running smoothly. It doesn’t matter if you’re new to the role or have years of experience, you can always learn and adapt to improve your financial management expertise.
Here are four financial best practices that BJM has identified over the years.
- First and foremost, successful managers work with their boards to establish a new budget every year. You can’t rely on last year’s budget to be an accurate predictor of this year’s expenses. Examine and predict what new costs might be incurred and look at where the budget came up short the previous year. Providing your community with a fresh budget each year is the best way to plan a smooth financial future.
- Managers should ensure that the reserve account is funded to the levels prescribed by the reserve study, and that funds are used only for the projects designated in the reserve study. Reserve funds are pre-allocated for major renovations, repairs, and replacements, and can not be used for operating expenses.
- Clarity is key when tracking budgets. Record keep for income and expenses should be as specific as possible. Document exactly what type of landscaping was completed and the specific details of what repairs were made to amenities. This gives you, or a future manager, the most accurate picture of where money was coming from and where it went.
- Sometimes the best course of action is recognizing that you need help before a problem grows too large. The experienced CPAs at BJM can help with tax prep, audits, budget reviews, financial health checkups, and more.
Our CPAs have decades of community association experience and would be happy to answer questions, assess your community’s financial health, or conduct an audit or other financial procedure. If you would like more information on how BJM can help with your community association’s finances, reach out to us at 678.551.2900 or firstname.lastname@example.org.