HOA bookkeeping is an important component of association management. However, because many HOAs lack accounting and financial skills, dealing with bookkeeping procedures and obligations can be difficult. This can lead to financial errors that can hurt your community. If you want to get help in this area, it may be time to consider hiring a HOA bookkeeping service. Here is how they may contribute to the financial health of your town.
What is HOA bookkeeping?
HOA bookkeeping documents, categorizes, and retrieves all of the association’s financial transactions. It is an accounting system that allows you to see the financial health of your community. A bookkeeper utilizes financial papers to ensure that everything is in order. Here are some crucial papers to know if you are learning bookkeeping for HOAs:
A Balance Sheet summarizes your organization’s financial situation. You may look at how much money is in your HOA banking accounts in this paper. It also includes a breakdown of your assets, liabilities, and equity.
The Accounts Receivable and Accounts Payable statements are also on the Balance Sheet. The Accounts Payable statement contains all of the association’s unpaid costs. Maintenance charges, utility bills, and municipal levies are all included. The Accounts Receivable statement includes all of the money owed to the organization. HOA fees, late fines, and other sources of income are included.
Statement of income and expense
The Income and Expense Statement is critical for HOA financial management. This document keeps track of all the money that comes in and goes out of your accounts. Income from HOA fees, investments, late fines, and loans will be visible. Utility bills, vendor payments, and maintenance fees are all included. This financial record may also be used to compare the HOA’s income and spending over time. You will be able to determine whether the HOA is under or over budget.
Another essential instrument for good HOA accounting is the general ledger. It is a record that details all of your organization’s financial transactions. The general ledger will provide you with an overview of your organization’s finances because it contains a lot of facts. You may also use this document to examine your financial transactions in detail.
Cash Disbursement records any money that enters and exits your accounts. It keeps track of all checks issued by the HOA. This document details when a check was issued, to whom it was issued, the check number, and the account from which it would be withdrawn. You may also provide more particular information, like invoices and billing statements.
Get the help of an expert.
Regardless of your financial condition or the size of your Homeowners Association, engaging an accountant may lead to a much more productive experience for all parties involved.
It is critical to employ someone who understands HOA Management Accounting before these complications arise, and you find yourself misusing money.