Property Management Chart of Accounts Free Sample Template

To help decide how to correctly set up your properties in QuickBooks Desktop, I’d suggest reaching out to your accountant. Once you’ve confirmed the appropriate setup, I can walk you through entering jobs and items in QuickBooks. It’s up to the HOA to determine which works best for their situation.

To put it plainly, this ledger shows the board members an official list of money flowing out of the association. It gives you a comprehensive and up-to-date look at your expenditures. hoa accounting According to Civil Code Section 5500(c), the Board of Directors must review the current year’s actual expenses and revenues compared to the year’s budget at least quarterly.

What Are Some HOA Accounting Best Practices?

However, you can of course modify your chart of accounts to accommodate the unique needs of your HOA. When a homeowner declares bankruptcy, the first thing your HOA board should do is check with your attorney or management company. Keep in mind that there are certain bankruptcy laws that protect bankrupt homeowners. Therefore, you may not be able to push through with any pending legal cases with the homeowner or collect past due balances. Lastly, the cash disbursements ledger lists down all of the checks your association has written and issued for the period specified.

Don’t use “Events Income” one year and then “Income from Events” two years later. Now you can access your HOAs accounting information online from anywhere with the FreshBooks Cloud Accounting app. When you entrust an automated service to interact with your residents, you don’t want it sending run-of-the-mill documents and notifications to them. You want professional invoices that clearly express what the resident owes and why.

Balance Sheet

The HOA board must review HOA finances for reserve and operating expenses. Because the budget must follow the accrual basis, financial statements should also follow the accrual basis. Civil Code Section 5300(b)(1) requires that the annual operating budget distributed to the membership every year follow the accrual basis. The law requires associations to prepare pro forma operating budgets that include all estimated expenses and revenues using the accrued basis method of accounting. When an elected community member self prepares financial statements, make sure that there is a backup of all financial records. Smaller, self-managed associations may have an elected treasurer, financial officer, or president that is responsible for compiling financial documents.

As a board member, you may opt for either one of these reports annually or not; it really is up to you, as they are not necessarily required. But, having some understanding of these various reports and what they entail will help you make that decision when all is said and done. As much as you’d want it to be smooth sailing from here, the truth is that HOA accounting is a subject that takes a lot of time and effort to master. For this reason, a lot of HOAs choose to seek professional help.

Reasons Why RunHOA Is THE Choice For HOA Accounting

It’s also not recommended to restrict their access to amenities or shut off their utilities during a trying period in their life. There’s no shame in asking for help, especially when it comes to a subject as difficult and confusing as accounting. Many HOA management companies offer accounting and other financial services as part of a package deal. It also allows your association members to make secure online payments.

• Furthermore, HOAs must file taxes, which is nearly impossible when you don’t have your community’s expenses organized from the very start.
• These documents will be available to everyone in the community, most of which do not have advanced accounting degrees.
• Connect your Venmo account to MoneyMinder PRO to directly download transactions, saving you time and effort.
• By default, HOA Messenger starts you off with three default Income Accounts; Assessments, Miscellaneous Income, and Interest Income.
• Your expense accounts are relatively easy to set up, as they’ll most likely be similar or identical to the 15 expense accounts listed on Form 1040.
• Let’s say an HOA’s reserve fund study comes back with two recommendations.