Accounts Payable, Accounts Receivable, Special Assessments, Tax Filings, Compliance Requirements and so much more are part of proper Condo and HOA Bookkeeping. Failure to handle these functions and accounting properly can cost a community association dearly. Having a volunteer handle these duties may seem like an economical method for getting these chores done but is it worth the risk and liability to the association if the volunteer makes a mistake? What if the volunteer decides they can no longer handle the association’s bookkeeping? Clearly, there is a place for volunteerism in any condo or HOA but using a volunteer to take care of the bookkeeping requirements of the association may lead to a costly mistake.
Proper and consistent reporting of the association’s financial assets are critical to the Board’s decision-making process. When reports are left to a volunteer, the consistency and correctness of the reports are only as reliable as the volunteer. If the volunteer is a fully qualified accountant who keeps current with your state’s laws and legal reporting requirements, he or she might just be able to get the job done as long as his or her schedule allows for the time required to get it right. Using a third-party source, such as Community Financials, assures the Board that it will always be right. Consistency is also guaranteed because the same methodology and reporting are used month after month, year after year. Further, because Community Financials keeps current on state laws and state reporting requirements, the association is further assured that its finances are being looked out for by professionals who do nothing but condo and HOA bookkeeping and reporting.
Volunteer burnout can strike at any time, including when you least expect it. External factors can come to bear on a volunteer who finds it necessary to resign. This can send a community association scrambling to find a new volunteer to assume the duties. This is far more complicated than it sounds as the new volunteer will need to become familiar with the previous volunteer’s methodology and reporting. Missing a filing date or placing an income or expense item in a wrong column can lead to confusion on the part of the Board who requires consistency in reporting to make informed decisions.
The risk of using a volunteer to handle the condo or HOA’s Bookkeeping needs simply outweighs the potential savings of using a paid third-party service such as Community Financials. Even the best-intentioned volunteer can make a mistake or have to resign their position. Either puts the community association at tremendous risk of inaccuracy or a missed filing that can be costly. A far better solution is to use Community Financials for all of the association’s financial accounting and reporting needs.