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Tips for Preparing Your HOA Financial Statements

August 1, 2021 BLOG Feature

One of the major responsibilities of being on an HOA board is keeping thorough, accurate financial records. Every budget created, every fee collected, and every purchase made or invoice paid in a homeowners association must be recorded and made available to homeowners and prospective buyers. Keeping up to date financial records is imperative for both transparency and future planning.

Be Thorough

When it comes to reporting finances for your HOA, it’s imperative that you don’t leave anything out. All money coming in or going out must be accounted for properly, not only so that your ledger is accurately balanced, but also for transparency with your residents. You’ll need to show them not just how much money was spent and gained, but also where it went or came from.

Be Considerate

Detail is key, but being thorough in your reporting often means including sensitive information. Things like legal payments, delinquent dues, fines or fees paid or received, etc. have to be included in the numbers, but names and situational details should be left out as much as possible. The last thing you want is for any of your homeowners or residents to feel publicly shamed, or to use information from the reports against their neighbors.

Be Consistent

Whether you decide to distribute your reports annually, biannually, monthly, etc., be consistent with the frequency as well as the format. Showing your homeowners your financial standings on a regular basis will put them at ease, especially when the structure and details of the report remain constant with each issuance. Residents will also come to expect statements at those intervals, and will become frustrated or suspicious if consistency is not maintained.

Be Straightforward

While a comprehensive report is important, you don’t want to get bogged down with unnecessary information. Don’t leave any numbers out, but keep it concise and easy to follow. If you hand out a financial statement that confuses your residents or is hard to understand, you’ll waste a lot of valuable time explaining or clarifying things. Stick to the bare bones of the what, the how much, and the where.

Preparing and distributing financial statements for your homeowners association can be confusing and time consuming. Our association managers can help you create thorough, straightforward, and discreet records that give your residents all the data they need and none of the info they don’t.

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