How HOA Management Company would manage your Finances
In the event of you using a community management company, you should rest assured that finances would be a new arena for you. The Phoenix HOA management companies would assist in the implementation of a similar annual process with TurboTax, QuickBooks and more.
When you make use of these services, it would become imperative to gain awareness about HOA financial management. It has been deemed of great importance to learn about the various ways of improving it. However, the question to ponder upon would be what kind of information should you be tracking, how you should be tracking the information, and can you understand the numbers.
There have been several essential tips made available for better management of the finances.
Conducting an annual audit
In the event of your association having a huge cash flow, an audit would be essential for the management. An audit has been the most comprehensive method for financial management. It would capture the overall scope of your HOA in the best manner possible. You should rest assured that it would also target the verification and substantiation processes along with inventories with creditors and debtors through a third party. It would not be wrong to suggest that the third party here would be the CPA (Certified Public Accountant).
Shifting the methods of accounting
A majority of associations would either make use of cash or accrual accounting methods. In a cash accounting method, expenses and income would be recorded as they would be paid and received. Therefore, it would be deemed in your best interest to contemplate on the long-term expenses along with being realistic to what you could afford by using a cash method.
Ensuring the security of the bank account
It would be inclusive of not providing authorization of large purchases by the property management company without discussing or seeking approval. Protecting the finances of your association would take effort from the board members along with the residents.