HOA work can get overwhelming even for HOA managers. There are so many tasks and duties, from facilitating meetings with the board, to dealing with vendors, to engaging with the community, to managing finances, and many more. Each of these is important and mustn’t be neglected but it can prove difficult not to drop the ball on one.
The accounting part of the job in particular can be challenging, especially when you don’t have an accounting background, which isn’t required to be an HOA manager in most cases. It’s best to hire an assistant, a professional, who can solely take care of the finances.
Here are ways an accountant can benefit an HOA.
Keep books clean and accurate
Keeping track of all financial matters and making sure they’re recorded properly help keep an association’s books clean and accurate. If the HOA you’re managing is large, this task can easily get overwhelming. Transferring this to an accountant can greatly free up your time for other pertinent matters involving the HOA.
Another great and efficient way to deal with balance sheet, income statements, general ledgers, and cash disbursements ledgers is to enlist the proper use of accounting software. In the hands of an accountant ensures it is used correctly.
Prepare financial reports
Consistent and complete financial reports based on bookkeeping are sent by the accountant on a monthly or quarterly basis so the HOA can keep track of the community’s finances. An accountant helps the board members clearly understand the financial reports and answer any questions they may have. Based on these reports, the HOA can make better financial decisions for the benefit of the community.
Create detailed annual audits
In addition to the financial reports, the accountant also prepares the annual audit of the association, which is a detailed and complete assessment of the HOA’s fiscal year. That includes income and expenses in comparison to budget as well as upcoming projects and the budget for that in the upcoming year.
The accountant will also walk the boar through changes and recommendations based on the report in order for the HOA to make informed decisions related to the preparation of the next fiscal year.
Advise on taxes
Another great benefit of having an accountant work for your HOA is the advice they can give you come tax time. An accountant can help make sure that your HOA is complying with tax laws and inform you of strategies to lower the taxes your HOA needs to pay.
With the money you save on taxes thanks to your accountant, you can reallocate to maintenance projects to improve the community and the living experience of the residents.
Assist with other accounting matters
On top of all that, the accountant can also help the HOA with funding options, loans, or misappropriation of funds.
For example, an HOA reserve study often intimidates board members but it is an indispensable part of running an HOA. Basically, it’s an assessment of the association’s reserve funds in order to plan current and future projects within the community. Maintenance work can be costly and so it can require years of planning and the reserve study helps give the board an accurate picture of their finances.
An accountant can help the board understand the study and how they can keep track of their expenses, how much money is spent, and how much they will need to allocate for certain needs.
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