Finding the best HOA accountants can be an uphill battle. You can simplify the process, though, if you know what to look for.
Much like any corporation, homeowners associations earn revenue and incur expenses. And, wherever there is money involved, it is important to track its movement. This is where homeowners association accounting comes in.
Board members have a fiduciary responsibility to manage the association’s finances. This ensures the financial health of the HOA and assures homeowners that their dues are being used properly. The lack of adequate accounting and bookkeeping can lead to several problems.
Without an accounting system in place, boards have no way of gauging the financial condition of the association. In other words, no accounting records almost always equate to poor budgeting. This is dangerous because boards may spend money the HOA does not have. It can also push the board to make decisions based on inaccurate financial information.
When the HOA overspends, the board will encounter a budget deficit. This can have a ripple effect on the community as a whole. With no money, the board will either be forced to levy special assessments to make up for the deficit or cut back on necessary expenses. Neither are favorable outcomes.
Poor accounting and fund mismanagement can spell serious consequences for the board. Homeowners may accuse the board of breaching its fiduciary duty and sue the directors personally. While board members are protected by state laws and their governing documents to some extent, going through litigation is never worth the trouble.
Most decisions also hinge on an association’s financial state. Therefore, proper HOA bookkeeping and accounting remains of paramount importance.
To some, an accountant or accounting service may not seem necessary. After all, if your self-managed board or management company has been doing things in-house for a long time, it can be difficult to see the need to change things up. Plus, hiring an accounting service or CPA is another expense you need to budget for.
However, the best HOA accountants and accounting services have a lot to offer. Here are some of the things a homeowners association can look forward to with professional help:
Although an HOA board can do accounting themselves, most lack the required expertise to do it properly. Meanwhile, others simply don’t have enough time on their hands. As such, it usually makes more sense to outsource the service to an experienced and certified professional.
Here are the best accountants for homeowners associations:
Associa provides a wide range of accounting solutions to homeowners associations. This includes preparing detailed financial statements, managing the HOA’s accounts payable, monitoring investments, and overseeing billing and collection of dues. Associa also takes care of account reconciliations, stays on top of delinquent accounts, and prepares and distributes checks.
CAP Management uses modern industry software and partners with local banks to deliver accurate accounting services to homeowners associations. Its services include total AR and AP management, daily account reconciliations, tax return preparation, and dues collection. Additionally, CAP Management assists HOAs with audits and budget preparation. To top it all off, this accounting service also provides board members with online access to financial reports.
Clark Simson Miller caters to communities of all sizes. The management company provides a number of accounting services in addition to its remote HOA management services. This includes customized financial reporting, dues collection and delinquency reporting, payment processing, bank reconciliation, annual budget preparation, and tax filing. CSM also assists with reserve fund maintenance and audits.
Community Financials offers a number of accounting and collection services to community associations nationwide. In addition to dues collection, the company also creates monthly financial reports, approves and pays bills, and gives board members access to the association’s financial records online. Sign-up is easy, and your HOA accounting can be up and running in just 30 days.
Elite Management Services specializes in accounting and collection services for homeowners associations. EMS helps boards prepare annual budgets, creates financial reports, assists with billing and collection, and processes invoices. The company also has its own internal controls to protect the association’s funds. Apart from that, EMS provides assistance with insurance reviews and audits.
With FS Residential, homeowners associations can look forward to financial reports prepared in a timely and accurate manner. The company also provides board access to financial information 24/7 with the help of a secure program. Every community is assigned a team accountant, who is available to field calls and questions as well as perform financial reviews. Beyond that, FS Residential offers help with budget preparation, annual audits, and tax preparation, too.
The service is already in the name — HOA Accounting Services. This company boasts full-service accounting help for both self-managed and managed homeowners associations. From accounting and financial reporting to monthly billing and AR management, HOA Accounting Services offers it all. Additionally, HOA Accounting Services is a member of both the Community Association Institute (CAI) and the Executive Council of Homeowners (ECHO).
HOA Assist helps ensure homeowners associations stay in good financial standing at all times. The company has a central database that board members and individual homeowners can access. HOA Assist also makes sure your community has enough funds to cover your expenses and events through careful financial report preparation.
LB Property Management’s accounting package includes a wide array of services that cover both AP and AR. The company helps collect and deposit dues, pay bills, and prepare the annual budget. LBPM also provides a number of financial statements including bank reconciliations. Apart from that, LBPM also works with escrow, loan, and title companies to ensure smooth real estate transactions.
Slatter Management provides accounting services to homeowners associations and condos. The company’s services include accurate financial reporting, timely AR and AP management, and convenient payment methods. Beyond that, HOAs can also expect a same-day deposit of collected receipts, account reconciliations, tax services, and payroll services.
It is tempting to simply go with the first or cheapest accounting service you find, but it may not meet the needs and expectations of your homeowners association. When it comes to money matters, it is always a good idea to hire the best HOA accountants or accounting services to ensure the financial stability of your community.