Remote Financial Management – What is it and How Does it Work?
Maybe you don’t have access to professional community association management services where you live. There may not be enough business in your town to support a community association management company. Plus it’s not practical for a larger management company to be in every town in the country. Similarly, you may not have access to a specialty bookkeeping business that has the knowledge and tools suited to a community’s needs to help with the accounting tasks. You may have chosen to self-manage your condo community or HOA because of the lack of help.
Recently, you may have heard of other boards using bookkeeping and administrative services to support their community and wondered how they do it?
Remote Financial Management handles the following accounting tasks: invoicing owners, collecting and depositing funds, answering payment questions, mailing late letters, working with collection agencies and attorneys on delinquent owners, paying bills, answering vendor questions and providing financial reports. Depending on its capabilities it may also help with the following administrative tasks: sending out violation letters, processing community mailings, handling lender questionnaires when an owner refinances and resale certificates when an owner sells. These remote financial management and administrative services handle over 55% of the work of operating a community.
You already receive all sorts of similar services from companies that are not located in your area or the actual processing of the services are handled from outside your area. Here are some examples: Collection – loan invoices, loan coupon books, credit card and utility bills are generated and mailed from a far off location; you also mail the payment to a distant location where they open, record and deposit the funds. Bill Payment – you receive an online payment request for a bill. You have set up an online account and review the charge, and approve it by pay the bill online – this happens by debiting your bank account, entering information from a check or by credit card. Financial Reports – you own shares in an investment and you receive financial reports in the mail or online from an investment manager or other business that is not located in your area. Customer Service – you call or email support and the customer service representative is not located in your town, plus it is much faster than getting in your car, driving and waiting for an answer.
Do you wonder how all this work gets done if the company providing you service is not located in your town? Well it’s quite simple these days.
Business Conducted Online
Many of the tasks that a community needs done on a monthly basis can be done using online business tools. For collections, coupons or monthly statements get mailed or emailed to unit owners. They then can mail a payment that goes into a bank’s lock box (never going into the service company’s office). The bank lock-box file that details the check payments gets uploaded into the service’s software. The latest community software packages like Caliber and Tops also offer an integrated web portal that allows unit owners and boards to access information online. Unit owners have the ability to review their account balance, payment histories and make a payment online by ACH or credit card. Board members use a restricted access area of the portal to conduct business like posting proposals to review online.
Another great feature to control the association’s money is the ability to review and approve bills online. Your bills get sent to a lockbox and get scanned into an online approval system. Two board members usually the Treasurer and President create a unique login. We can set up 2 board members to approve all bills or just have a 2nd board member approve bills over a certain dollar amount, this provides oversight. By approving the bill online they have digitally signed off and then the payment gets processed. One benefit of this feature is you don’t have the problem that signing physical checks had: there is no need to hold up bill payments while you wait for the President or Treasurer to come back to town. An additional benefit of this feature is a board can quickly research expenses and determine the cost of a certain vendor. For example your association wants to see what it spent on oil for a certain time frame, you can run a report by vendor and get a summary of the total cost, the backup invoices and compare it to the previous year. Similarly, this feature can allow your CPA/ Auditor to access invoices online. This has saved boards money since there is no driving time and no time spent hunting through file boxes for invoices.
Boards can view bank accounts online. We often set up the entire board with access to look at up to date deposits (from mailed in checks that went thru the lock-box or online ACH and credit card payments), checks paid and current balances as well as view and print bank statements. It is important for the board to have transparency, double check its other members and keep an eye on association funds.
Financial reports typically get emailed or mailed to board members without email access. Providing reports to all board members ensures transparency. Emailing also speeds up when you receive reports and it cuts down on the file boxes that take over your closet space.
Communication Enhanced by Technology
The standard way of handling communication is just picking up the phone. The person looking into your payment or answering accounting questions can be anywhere. Mail is still useful in conducting association business. Many people want a mailed coupon book or monthly statement and will mail in their payments. Email is a great way for boards to communicate with their service providers and unit owners. Some systems allow that if a unit owner has an email address in the system they can receive notices by email, if not a mailing goes out. This can save the association money by reducing the hard costs for mailings.
A web portal is a great tool to provide boards and unit owners access to community information around the clock. A unit owner can look up their account balance and update their contact information. Boards can upload rules and regulations and the community’s insurance certificate to allow unit owners to get this information when they need it.
Screen mirroring is a tool used to look at software or a document on another person’s computer to help overcome usability issues or provide answers when emailing back and forth and talking over the phone is not getting the job done. Video calls are another great way to communicate from distance. When you have a question and you think a face to face meeting would be best you can do it from a distance. The board may consider using a speaker phone call or video call for an accounting staff member to answer questions at a board meeting. This is a great way to save time and money and get that personal touch. Webinars are a great way to educate clients, for example we can “show and tell” different software features or how to read financial statements to many board members simultaneously.
Benefits
Remotely providing services has many benefits. First, service can be provided to towns without a community management company. Second, someone that has expertise in community association accounting and financial reporting may not reside in or near your town. Third, the companies close to your community may not offer the latest software features which make the board’s job easier (i.e. online bill review and approval) and provides what unit owners want (i.e. online payments).
Lastly, these services can be less expensive. The service provider does not have to pay for the cost of additional offices so they can pass the savings on to you in the form of a lower fee.
Summary
You may be skeptical of working with a company not located in your area. However, you receive a lot of remote service already from credit card companies, utility companies and banks. Decades ago companies used the technology of call centers and mail processing centers to provide service. Now there are even more tech tools that assist in providing you collection, bill payment, reporting and customer service. If you want to learn how remote service can work for your condo community or homeowners’ association contact Community Financials for a free consultation.
