December 22, 2021 Education
What does it take to maintain a neighborhood? Why is it that some neighborhoods have swimming pools and others don't?
The truth is that homeowner's associations (HOAs) are responsible for this. They are the entity that makes sure the whole neighborhood is well maintained and safe. They ensure that any amenities are usable.
But they can't do this for free. Residents must pay fees if they want to enjoy these benefits. Then the problem is that someone has to manage that money.
Professional HOA accounting services often help HOAs keep on top of finances. Read on to learn what HOA financial services are and why your HOA needs them.
A homeowner's association is an organization dedicated to the upkeep, improvement, and promotion of a neighborhood. This usually consists of a group of residents that live in that neighborhood. Residents within the neighborhood pay money to the HOA so that they can enjoy certain perks.
In some neighborhoods, this means enjoying certain amenities such as a pool or tennis courts. An HOA may also pay for residents to have a yard service.
They'll also organize events throughout the year. They might have a block party to celebrate the end of the school year or Halloween.
But the issue is that all of these things cost money. This is why residents pay into their HOA in the first place. This also means that the residents that run the HOA need to know how to maintain their budget and keep their financial information up-to-date.
Some homeowner's associations find that maintaining their own personal financials as well as the neighborhood's financials is too much for them. The good news is that there are solutions available. The HOA can choose to hire a professional to help them keep on top of the neighborhood's finances.
Homeowner's associations are not exempt from taxes in the state of California. They're also not immune to fraud. This is why good bookkeeping is so important for an HOA.
There are a few things an HOA should be keeping track of for bookkeeping purposes. These should be as detailed as possible. The first thing that they need is an accurate statement of income. It will show how much money has gone into the HOA throughout the year. This will be important during tax season since that's how the state will decide how much the HOA owes. There should be a record of receivables. This should show how much money is owed to the association and by whom. It should also say if there are any credits due from vendors. The HOA should have a record of how much is in their reserve fund. This is money required by law to be set aside for the maintenance and replacement of the neighborhood's amenities. Your HOA should also have a general ledger to show all account activity. This should include all balances and bank statements for the HOA's accounts.
This promotes transparency so that residents understand where their HOA fees are going. It also helps the HOA make better decisions for the community’s financials.
The other side of the coin is HOA management. This refers to the day-to-day running of the HOA and how its funds are used. This means making sure that any questions or concerns from residents are handled efficiently and professionally. It means that the HOA ensures that residents are paying their fees on time. And it means that any events or amenities are being taken care of without overspending. But HOA boards are made up of people, too. These people have jobs and families that also need their attention. So, an HOA board can't meet every day of the week or make sure that everyone's paid their fees on time. This is especially true in larger neighborhoods with a lot of residents. Therefore, a lot of HOAs turn to a professional for HOA operational support. A professional will be able to help your HOA find vendors that won't blow the budget. So, if they need to hire a yard service or pool maintenance crew, they can do that. They understand HOA requirements and expectations. This gives them the ability to help the HOA stay organized and prevent overspending.
Clearly, the foundation of a good homeowner's association is strong HOA accounting. Not every HOA is equipped to handle that on its own.
That's why Crummack Huseby offers professional HOA financial services and management. We make sure that your HOA can get back to making sure the neighborhood is running smoothly without ever worrying about finances. On the financial side, we'll maintain your general ledger for you. We'll even set up your HOA with an online payment system so that residents don't need to worry about making time to pay their fees. We'll also set up operating and reserve funds for your neighborhood for whenever there's an emergency. We’ll help you create a budget every year and we'll provide your HOA with a monthly financial report. This gives your HOA an even better idea of your neighborhood's financial situation. That means your HOA can plan events and maintenance with confidence. On the management side, we're here to help your neighborhood achieve its goals. We'll help your HOA find the best ways to promote the property value of the homes in your neighborhood. We're able to get your HOA in touch with some of the best vendors on the market. And most importantly, we're quick to respond and provide emergency services 24/7.
It's not always the HOA board's fault that they can't maintain the HOA's finances. These people are human; they make mistakes and have busy lives. That's why professional HOA accounting services are so important. They take care of the hard parts so that your HOA can focus on what really matters to them: the maintenance of the neighborhood. And Crummack Huseby has the best HOA financial and management services in California. Our experts are ready and happy to help your HOA! LET’S START A CONVERSATION.
photo source: @NORTHFOLK