working with an accountant

Started by MichaelJ8 • 10 replies • 1678 views

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MichaelJ8 (Illinois)
Posts: 113

Posted:

For those associations who use an accountant for their monthly finances, how do you do it? Who collects the monthly fees and pays the bills? Nobody wants to take over the treasures job and I am tired of it. I need to know how the system works before I quit. Thanks for any replies

SusanW1 (Michigan)
Posts: 5,202

Posted:

Your HOA still must have a treasurer. What you are saying is that the monthly billing and paying bills will now be done by either a billing company or an accountant. The treasurer still must oversee everything and make a monthly report to the board.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Michael,

You need a property management company that can handle day-to-day affairs and bookkeeping, allowing your board to take a big picture oversight of the community.

Our property management company (Approximately 11% of our gross collections is their fee, essentially)

1. Collects dues and does the dirty work of collecting delinquencies in a business-like and legal fashion

2. The company has a different official handling our books and accounting. It's independent of our day-to-day manager's duties with authority NOT possessed by our manager.

3. Our board receives a monthly financial and budget statement for review as well as copies of monthly bills and invoices. We generally don't need more information than monthly statements as we've developed a relationship of professional trust

4. The property manager makes sure our needed jobs are completed but the company accountant writes the check to pay the vendor after the president authorizes payment. "Regular bills" are paid automatically without HOA approval. Payment is implied.

5. Their operations with us are audited by a third-party firm.

It is worth every penny to have professionals handle the daily needs and accounting of an HOA. It removes many doubts between home owners, offers transparency and uniform reporting of information and prevents the pitting of neighbor vs neighbor where it's unnecessary.

Good luck!

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Michael,

One more thing, our treasurer reviews the reports and asks questions where needed. It's much more like a board of directors. The treasurer of our HOA issues no checks but has influence on matters of spending and budgeting.

TimB4 (Tennessee)
Posts: 21,047

Posted:

Michael,

As Susan said, your Association must have a Treasurer.

We don't use an accountant, but we did contract out bookkeeping services (which is a member of the Association). The bookkeeper picks up the mail, maintains individual lot accounts for assessment payments, sends initial late notices and deposits checks. The treasurer oversees the bookkeeper but typically only has to issue checks, transfer money into the Reserves, send any notices about late assessments after the initial notice, file taxes, prepare financial statements and propose the next years budget.

We usually have no problem having someone serve as Treasurer.

MichaelJ8 (Illinois)
Posts: 113

Posted:

We usually have no problem having someone serve as Treasurer. Boy I wish that was the situation here. As treasure I do it all, collect fees, pay bills. I do take all info to an accountant to do year end tax reporting. We are only a group of 17 at the moment.

BuddyJ (Maryland)
Posts: 37

Posted:

You should ask your bank if they can help with depositing the hoa dues to save you a lot of leg work - our local bank provides us barcoded coupons with self-addressed envelopes so each owner mails their payment directly to the bank and the bank provides our treasurer with the payment status about 2x per month. Our bank does this at no charge for us just so we use them for our hoa accounts. Just an idea to consider.

TimB4 (Tennessee)
Posts: 21,047

Posted:

Buddy,

Please send me the name of the Bank, as this sounds like something I'd like to propose to our Association.

[email protected]

Thanks

BradP (Kansas)
Posts: 2,640

Posted:

Another option that is out there is online payments via a third party. With the accounting software we use members can pay online and the system automatically debits our bank account and credits their account in our software. It is free for the members and only costs us 50 cents a transaction, in my opinion well worth it. we just started it but have had about a 1/4 of our 167 members interested.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

We had an accountant that managed our accounts for us. We still had the treasurer's position but since our accountant was a HOA member they got that position. It made things easier and was a real accounting firm she owned. It wasn't an individual. So you need to treat hiring the accountant as if you were hiring any other contractor. Make sure they are licensed and insured. What they charge. What costs your HOA will pay. We had to pay for our own office supplies and check ledger. Which the check ledger was several hundred dollars to purchase because it was special.

Our HOA also had a 2 signature check signing rule. The accountant and two other board members had to sign the checks in order to cash them. That way there was accountability. Only the board members with their signature on record at the bank could sign those checks. It was typically our Secretary, Vice-President, or President. The Treasurer's signature wasn't enough because the other authority had to be the accountant's. It provided more oversight and less renduncey. A system you should check into.

It depended on the bank's policies if automatic withdrawl could be arranged or not. Our bank ONLY allowed it if you had an account with them. Otherwise you were subject to a fee. A member could put their whole years dues payment in an account and have it automatically withdrawn each month never missing a payment or being subject to late fees. Each bank is different and would need to be looked into.

Former HOA President

SheriC1 (California)
Posts: 15

Posted:

Do you mind emailing me the name of your bank, too? frogtalkr AT aol DOT com Please do not space after the name and use @ for AT and . for DOT, OK? Thank you.

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