August 19, 2021 - BY Admin

Four Important Financial Reports

Knowing the HOA’s financial well-being is of utmost importance. This is where a good Manager will come in handy. The Manager is in charge of preparing all the financial reports for an HOA each month. However, just because a Manager handles these reports doesn’t mean that the HOA Board Members shouldn’t be aware of what they are and why they’re important. After all, understanding what the Manager should be doing is a good way to keep track of whether or not they are on task. Ensuring your HOA Manager is staying on task can drastically cut down on time spent on the HOA’s finances during meetings.

Here are the necessary documents your HOA Manager should be preparing and delivering on a monthly basis:

Balance Sheet
This is a snapshot of where your HOA’s finances are currently. Whether it’s all cash, all assets, or a mix of both, the balance sheet will tell you exactly what you can and cannot afford based on readily available resources. For more information on balance sheets, be sure to check out our article on Maintaining Balance On Your Balance Sheet.

Income & Expense Statement
This statement shows exactly what its name refers to: money brought in and money spent. It’s important to compare actual vs the budgeted expenses at the end of each month. Your HOA Manager should be providing the comparison. If not, please don’t hesitate to ask. The comparison allows you to further analyze your financial situation and correct any mistakes or errors in your budgeting.

Statement of Aging Receivables
This is just a fancy way to say a list of overdue debts. This shows the debts that have yet to be collected.

Bank Statements with a Reconciliation Attached
A bank statement is an important accounting document to review as that’s where the money for the HOA is held. A reconciliation a way to check that the money claimed to have been spent was actually spent. It’s just another way to ensure that the information is accurate and that no one has sticky fingers when it comes to handling HOA money.

Try to get the reports roughly 24 hours before the meeting takes place so that everyone has appropriate time to review them.