How to Give a Financial Report

Started by KevinB6 • 8 replies • 5537 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

KevinB6 (Illinois)
Posts: 36

Posted:

I have been elected treasurer and have to give a financial report at our monthly home owner meetings. Can someone please give me some pointers on how to give a financial report. I have been given the financial statement, which lists the Assets, Liabilities, Owners' Equity, Total Reserves, Income, Investment Income, Expense, Contracts, Capital Expenses, Total Expense, Net Income / (Loss), to name a few sections. Any help would be appreciated.

RogerB (Colorado)
Posts: 5,067

Posted:

Kevin, For financial reports we provide a monthly Balance Sheet, Income Statement, Aged Accounts Receivable, Check Register, and Cash Flow Chart to clients and/or other financial reports as requested by each individual HOA. Plus a proposed annual budget once a year and an updated 20 year reserve plan about every 3 years.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kevin,

Since you are asking how to give a financial report, I'm of the opinion you have no bookkeeping or accounting experience. If that is the case and you are having trouble thoroughly understanding the financial statement, I would suggest asking the mgmt co if they could provide someone to explain things to you.

When giving a financial report you can be very elaborate or you can just say what the income and expenses were for the month and whether there was a profit or a loss. This may suffice for some boards. However some boards may expect much more. Our treasurer explains how the net income or loss and expenses compare to the budgeted net loss or income and expenses for the period. And will also indicate what expense items were over or under budget. If there were any accured expenses they are noted as well as any reserve activity. If there are any large recievables they may be discussed as well. Delinquencies are discussed in closed session.

KevinB6 (Illinois)
Posts: 36

Posted:

Roger,
Thanks for responding, I was told that I had to include in our financial report whether we were over budget for the month and look at what put us over budget. Outside of that, no one on our board can really explain to me how to give a report.

KevinB6 (Illinois)
Posts: 36

Posted:

Mary,
Thanks for responding, I will ask our management company to explain how to give a financial report.

PeterB1 (Florida)
Posts: 257

Posted:

Kevin,

A critical part of what you report is what the Board will understand. There is no point in reporting things in a way that no one cares about. Part of the process is not just what you report, but how you do it.

Our last Treasurer read the income and expense numbers right off the financial statement and everyone fell asleep - it had no significance. I use the budget vs actual numbers to highlight to the Board what is going well and what is not going well. This way I can point out areas of concern.

I suggest you report in a way that you are comfortable with. Regardless, you should make the written report available for those who want to see specific areas.

peter

KevinB6 (Illinois)
Posts: 36

Posted:

Peter,
Thanks, I am not sure if any of the other board members, besides the property manager clearly understand the significance of the different balances. The property manager simply told them whether the association was over budget or under budget. When, I asked them about the specifics of giving the report no one could give me an example.

GlenL (Ohio)
Posts: 5,491

Posted:

Kevin, each Board member here gets a copy of the balance sheet, a summary of monthly expenditures vs YTD vs budget and a copy of the delinquencies. Any homeowners attending the meetings are given the same documents with the names of the delinquencies redacted. The treasurer just hits the highlights of the balance sheet, amounts on deposit in checking, reserves, petty cash, Total Current Assets vs Current Liabilities and Equity. The monthly is only used to point out any large or unusual expenditures.

Studies show that 5 out of 4 people have problems with fractions

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By KevinB6 on 07/07/2010 6:30 AM

Roger,
Thanks for responding, I was told that I had to include in our financial report whether we were over budget for the month and look at what put us over budget. Outside of that, no one on our board can really explain to me how to give a report.

Our income statement lists line item totals for income and expenses plus net income in 4 columns: 1) actual current month; 2) Budget current month; 3) actual YTD; and budget YTD. If there is a significant variance in one or more actual vs budget monthly line items they can be easily pointed out. The net income is the bottom line with YTD net income also posted on the Balance Sheet.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here