- Joe Wise
Basics of HOA Financial Reporting
Financial reports for homeowner associations can be confusing for many HOA Board members. These reports are much more detailed than financial records for the average homeowner. Yet, most Board members are expected to compare and analyze financial reports. Whether you engage a professional or self-manage your financials, interpreting financial reports accurately is mandatory for sound community decisions. Here are some basics to get your Board members up to speed.
Balance Sheet: The balance sheet shows assets minus liabilities and gives the net worth of the association. To be accurate, this report must balance…thus, the name balance sheet. The result shows how much money is actually available in the association’s bank account.
Cash Disbursements: This register shows the amount, check number and date written for HOA checks. It provides an overall view of current for the association.
Income and Expense Statement: This could be one of your most important financial management tools. It contains monthly expenditures compared to budgeted expenses. This is a great tool for annual financial snapshot for your HOA. It’s also a good report for future expense planning when you prepare an annual budget.
Account Delinquency Report: This report provides the association with a list of members who are not current on assessment fees, late fees, deed restriction fees, and legal fees, etc.
General Ledger: This provides a complete record of financial for the association. It includes assets, liabilities, revenues and expenses that can be used to prepare financial statements for the association.
Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN-VA. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.