You volunteered for the board and its more work than you anticipated.  To reduce the board’s workload you are contemplating hiring a company to do the monthly bookkeeping tasks.  You haven’t shopped for this type of service before so don’t feel 100% comfortable, but how to do you make the right choice?  How do you make a safe choice selecting a company to handle your condo community or HOA’s bookkeeping & financial management?

Make a Safe Choice

Review your vendor options and the most important factor is to make a safe choice for your association.  This is not a time to choose the cheapest option.  Potential pitfalls such as loss of funds from improper collection practices as well as the potential for embezzlement make this decision critical.  If you don’t have trust in your association’s funds you will not have good information to operate your community, you will add frustration and you will lose sleep.

5 Criteria to Help you Make a Safe Choice:

1. Hire a vendor with specific Community Association Financial Management expertise & experience. Communities have declarations and bylaws and in some states have regulations that need to be understood.  One first step is to work with someone that is a Community Association’s Institute (CAI) Member.  CAI is a non-profit organization that educates managers, vendors and board members to keep up to date with community association policies and procedures.  Next choose a service that has a professional designation.  To receive a designation a person must study and pass an exam and continue with and continuing education requirements.

In CA – The Community Association Managers’ International Certification Board (CAMICB) Certified Manager of Community Associations (CMCA®) certification program meets the requirements of California law.  There are currently 18,000 individuals with a CMCA designation.

2. Are they licensed? A handful of states require a Community Association Manager, Real Estate Broker’s or Certified Public Accountant license to collect and supervise association funds.

States with Community Association Manager (CAM) licensing are: Alaska, California, Connecticut, Colorado (requirement ending 7/1/19), Florida, Georgia, Illinois, Nevada and Virginia.  Some people may interpret the laws that a CAM license is not required for bookkeeping.  But in many state’s definition of a CAM say that if a person is collecting and overseeing association funds they must be licensed.  Here are some examples:

Florida – If someone provides management services for an association with more than 10 units, or a budget of $100,000 or greater, and receives compensation for those services, a community association manager license is required. A community association manager is defined as a person who is licensed to perform community association management services including the following:

  • Controlling or disbursing funds of a community association;
  • Preparing budgets or other financial documents for a community association;

Georgia – A community association manager is a person who, for a valuable consideration, to others of management or administrative services on, in, or to the operation of the affairs of a community association, including, but not limited to, collecting, controlling, or disbursing the funds; – person needs a real estate broker’s license or a Community Association Manager’s license and working under a GA Real Estate Broker.

Illinois – A community association manager is an individual who administers for remuneration the financial, administrative, maintenance, or other duties for the community association, including the following services:

  • Collecting, controlling or disbursing funds of the community association or having the authority to do so.
  • Preparing budgets or other financial documents for the community association.

So to be extra safe if your community is in one of these states you may want to hire a company that is licensed or at least keep it in mind.

3. Hire a Company With Insurance. General business liability is good but more importantly we are talking about having a fidelity bond or a crime insurance policy.  You want coverage that insures against an employee stealing association money.  Don’t forget to check with your state, some states have minimum coverage requirements, here are some examples:

Connecticut – “no less than the sum of three months’ assessments plus the highest estimated level of reserve funds over the next 12 months.”

Nevada – “Managers or employers of managers must maintain insurance covering liability for errors or omissions, professional liability or a surety bond to compensate for losses in an amount of $1 million or more.”

Virginia – “must carry a blanket fidelity bond or an employee dishonesty insurance policy. The policy must provide coverage in the amount of either $2 million or the aggregate amount of the operating and reserve balances of all associations under the control of the common-interest community manager during the prior fiscal year; whichever is less.”

4. Technology to Help Transparency. Look for a vendor with systems that provide transparency and are geared to communities so you get the tools that will reduce the board’s workload.  The top 2 online tools to keep an association safe are online banking and online bill review and approval.  Online banking allows multiple board members to see deposits,  checks written, the current balance and view past bank statements (and checks paid) online.  Online bill review and approval is a great tool.  Before checks are cut 2 board members can go online and review and approve the bills.  There are no surprises at the end of the month because you’ve approved bills all month long and having 2 board members approving provides for added oversight.

5. Added Risk Reduction. To make your decision even safer look for a few more items:  1) A clearly written financial management agreement that explains the services so there is less room for unmet expectations.  2) The ability to cancel the agreement if you are not happy at any time with 90 day or less notice so you are not stuck.  3) No start up fees means you have less money at risk and only pay for the services you use.


One thing to keep in mind: proximity matters less than the 5 items listed above – they take precedence.  Chose a service with these qualifications over whether the service is located in your area.  Just like many credit card companies’ mail and process statements in places like Sioux Falls, Idaho or Wilmington, Delaware, today it matters less where your common charges are mailed from and financial reports are generated.  Most business communication is handled by email, phone and video calls and financial reports are emailed or posted online anyway.  If the service has an office near you that’s just an added bonus.


Having a company handle your community associations’ finances is a big responsibility.  As a board member you have a fiduciary responsibility to protect its funds.  Besides finding someone that will do a good job of producing accurate and timely financial reports look for qualities that lower your risk.  So how do you make a safe choice selecting a company to handle your condo community or HOA’s bookkeeping & financial management?  By taking into account the attributes outlined above you will make a better decision and gain peace of mind.  A financial management vendor that meets all these criteria is Community Financials.