Good financial management is critical to a successful HOA, but it can seem an overwhelming task for even the most experienced association board members, with the possibility of lawsuits an ever-present concern. Fortunately, with some effort and dedication, financial stability is entirely possible.
Here are some key ways to help your board can ensure that your association’s finances are protected and well in order.
It’s a good idea to regularly evaluate your association’s expenditures to determine the best ways to both save and spend money. This can also help offset member fee increases and ensure that the most important and beneficial community projects are well-funded. HOAs should also have a period audit performed in order to confirm that all financial documents and records are in order.
Be Sure to Budget
Your budget serves as the basis of monthly assessments and should be as accurate as possible in order to prepare for and avoid special assessments and other financial emergencies. As you plan your annual budget, take a look back on the previous three years’ financial reports to recognize trends and make any needed adjustments. It’s also wise to look ahead and make adjustments for any possible changes such as wage or inflation rate increases.
Transparency is Key
HOA boards must ensure transparency when it comes to their finances. Homeowners contribute their hard-earned money to the association and deserve to know how those funds are being used. A trusting relationship between the board and community members is critical to avoiding future discrepancies and expensive legal disputes.
Get Help if Needed
Budgeting for help with financial matters can be well worth the expense, and can save you money if it means avoiding costly lawsuits. A CPA should be used to prepare your annual audit, and a reliable accountant can be invaluable in making important financial decisions and ensuring record accuracy. HOA boards have many important responsibilities, so if needed and when it comes to financial health, don’t be afraid to ask for assistance.
At JellyBird, we strive to help you protect your HOA Finances and manage your HOA successfully. Talk to us today to learn more about what we can offer.