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Subject: Resident wants to directly deposit funds in our account
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Author Messages
SiobhanB
(New Jersey)

Posts:8


04/13/2011 2:53 AM  
I have a resident who is not happy with the amount of time it takes for us to deposit her check. Because we are transitioning to a bookkeeper and have not had one for a while, it has taken up to 6 weeks to deposit her check for $100.00. We collect dues 4 times per year. She now said that is too long and will be depositing into our account directly and we can check our statements each month to see her deposit. This will cause problems for us because we then we will have no verification that it is her check. Even if she sends us the deposit slip, I do not want to start this especially with a difficult person like her. We told her she is not authorized to do this but rather send it to our po box but she said she can do it and will. Does anyone know what I can do to stop this?
MelissaP1
(Alabama)

Posts:10576


04/13/2011 4:18 AM  
You haven't changed banks just bookkeepers? Why don't you discuss the options with your BANK? Our bank allowed automatic withdrawl if you had an account with them. So a member could simply open an account equal to the yearly dues, and have them appropriately withdrawn for them. That way they never forgot and we got paid.

This sounds like a bank option that should be made available. Many banks even if it isn't the HOA's bank offer automatic withdraw. The deposits will then show up on the HOA's bank statements. However, it may not reflect the person who paid. That may required a different system but something that should be easily remedied as well.

Former HOA President
JohnO6
(Georgia)

Posts:424


04/13/2011 4:32 AM  
Siobhan -

There may be banking or other professionals who know better than I, but here is my understanding of the situation.

There are two types of electronic payments that folks sometimes confuse with one another.

The first are ACH (Automated Clearing House) payments which are truly bank-to-bank electronic funds transfers between permissioned accounts. Permissioned means that both the account from which the funds are being withdrawn must have given permission AND the account to which the funds are being deposited must be set up to accept such payments.

The second type are the online bill-pay functions available from most banks for anyone with a bank account at the institution. While those payments CAN be ACH payments, they are only the ACH type to accounts that are set up to accept ACH transfers. Other "e-payments" are actually printed and mailed checks to the payee.

So I think the bottom line is this - if your account isn't set up to received ACH payments, her e-payment will NOT flow directly into your HOA account. Rather, she thinks it will, but in reality the bank will print and mail a check to the HOA - essentially the same thing that's happening with her mailing her own check now.

To be sure, I suggest you check with your bank, but I believe what I've stated above is accurate. If not, I hope someone corrects my misperceptions.
SiobhanB
(New Jersey)

Posts:8


04/13/2011 5:19 AM  
I am wondering if she does deposit the check if I can reject it as an unauthorized deposit since we do not know where it is coming from. I do not want to give her options because we are a rather small (76 single family homes). I would like her to follow the rules and do as we have asked. We told her it will be more timely and the only reason she is doing this is to annoy the Board.
TimB4
(Tennessee)

Posts:17830


04/13/2011 6:02 AM  
Just tell her that the Association is currently not accepting payments that way. Suggest that she should look if her bank has a bill paying service (most do) and she could utilize that. We have many members that use this service and the bank takes funds from their account and mails a bank draft to our P.O. Box with the member name and info.

Tim
CharlesB17


Posts:112


04/13/2011 8:20 AM  
One thing I was taught in a business course about advising companies in collections and how to increase your cash flow is to get the money in the bank as fast as possible with the least amount of difficulty. The faster the money comes in, the more money you make. Most HOAs fail to understand this principle.
We accept payments online, the received payments are tracked and the members accounts are posted immediately.
We chose to use PayPal as our processor, several reasons determined this and I am not addressing that issue here and now. But, The faster you can collect the dues, the more money the association has to work with and the more interest they collect on the funds in the bank.
Without promoting any software brand, this is what is nice about most software programs, especially ones running in the cloud. All data is then live and up to the moment.
I would suggest finding a method to allow your members to pay online and encourage them to do so. Less bookkeeping errors, less headache and less paperwork.
GlenL
(Ohio)

Posts:5491


04/13/2011 9:11 AM  
Siobhan six weeks to deposit a check I can understand her being P/O'ed. It is so easy to look at a balance and assume the something you sent a month and a half ago has cleared and overdraft an account. Note I didn't say it was fiscally prudent not to reconcile your checking account, just that it was easy to do. On the plus side for her, she gets a few extra pennies of interest while you're holding her check. A big negative is the HOA looses a few pennies of interest.

P.S. The deposit isn't blind, there is a name attached so you know who to credit it to whenever you get around to it.

Studies show that 5 out of 4 people have problems with fractions
SusanW1
(Michigan)

Posts:5202


04/13/2011 9:37 AM  
Any individual or business can set up a PayPal account.

6 weeks to cash a check is TOO long.

There should be minimum bi-monthly deposits at dues time.
CharlesB17


Posts:112


04/13/2011 10:54 AM  
absolutelu !
SiobhanB
(New Jersey)

Posts:8


04/13/2011 11:12 AM  
Glen, How does our bank communicate the names of any unauthorized depositors to us? I have never seen it on our statements. We always deposit the checks after we credit the payment on our books.

6 weeks does seem to be a long time but who do we expect to speed this up?
JanetB2
(Colorado)

Posts:4211


04/13/2011 11:39 AM  
Hi Siobahn:

I would suggest your Treasurer could speed this up in possibly making a copy of the checks to be deposited and attach the deposit slip to the copy (you can put more than one check on the copier glass), so it would be fairly inexpensive alternative. They can give this information to the bookkeeper to enter the data. This would work until everything is in place with regards to your new system.

SteveM9
(Massachusetts)

Posts:3615


04/13/2011 5:03 PM  
For small associations, cashing checks can take awhile. No treasurer wants to run to the bank everyday.

Its good to setup a system. Tell the owners, checks will be cashed two times a month. The 1st of the month and the 15th of the month. Be consistant and everyone will be happier.
CharlesP6
(Virginia)

Posts:2


04/18/2011 5:03 PM  
I love these topics.

I actually just helped out my friend in Germantown, MD and my own HOA by setting up accounts with WePay.com (Disclaimer: I work at WePay). I understand this is sort of "conflict of interest" but I wouldn't want to recommend something I didn't think would help.

Simply put, my HOA previously took 5 weeks to cash my check. That's unacceptable, especially since I manage my monthly budget very strictly. With WePay, a Treasurer sets up an account on WePay (free to do so and it's FDIC-insured). The Treasurer sends out recurring HOA dues bills to everyone in the complex. Individuals can choose to opt-in automatic payment or pay as the dues come in. If individuals pay by bank account, it's only $0.50. If they pay by credit card, it's 3.5%. The treasurer has an internal tool that tracks who has paid or not paid, and the WePay system sends out automatic email reminders to those who haven't paid. It's very simple. I helped make it that way to scratch my own itch

After the dues are collected, the Treasurer can transfer the money into the HOA Bank Account free of charge. The Treasurer isn't required to keep a "Float" in the account, like PayPal does (often as high as 30%).

If anyone needs any help, respond to this post. I wouldn't steer you in the wrong direction. Something needs to be done to modernize HOA dues collection.
CharlesB17


Posts:112


04/18/2011 6:18 PM  
Posted By CharlesP6 on 04/18/2011 5:03 PM
I love these topics.

I actually just helped out my friend in Germantown, MD and my own HOA by setting up accounts with WePay.com (Disclaimer: I work at WePay). I understand this is sort of "conflict of interest" but I wouldn't want to recommend something I didn't think would help.

Simply put, my HOA previously took 5 weeks to cash my check. That's unacceptable, especially since I manage my monthly budget very strictly. With WePay, a Treasurer sets up an account on WePay (free to do so and it's FDIC-insured). The Treasurer sends out recurring HOA dues bills to everyone in the complex. Individuals can choose to opt-in automatic payment or pay as the dues come in. If individuals pay by bank account, it's only $0.50. If they pay by credit card, it's 3.5%. The treasurer has an internal tool that tracks who has paid or not paid, and the WePay system sends out automatic email reminders to those who haven't paid. It's very simple. I helped make it that way to scratch my own itch

After the dues are collected, the Treasurer can transfer the money into the HOA Bank Account free of charge. The Treasurer isn't required to keep a "Float" in the account, like PayPal does (often as high as 30%).

If anyone needs any help, respond to this post. I wouldn't steer you in the wrong direction. Something needs to be done to modernize HOA dues collection.





Charles, How do you handle people that wish to continue making payments with paper checks? This solution is no better than PayPal, which offers E-check options and we only pay approximately 3 % per transaction, actually less, on our merchant account. And PayPal deposits monies to our bank account for free.
Sounds like you may be scratching your itch, lol Not intended as an insult. But, maybe a little self promotion as I have been accused of?
CharlesP6
(Virginia)

Posts:2


04/18/2011 6:29 PM  
Hah. Nice. Yes, self-promotion, but we all self promote things we believe in.

Regarding PayPal vs. WePay, there's a lot of differences (all of which I will not dive in here). Try it out: the proverbial, "have to see it to believe it." For one, you can mark people as "paid offlline" on WePay. This is not true of PayPal. WePay is also $0.50, not 3.5% and those paying don't have to register for WePay.

Ultimately, to address your reply, nothing is ever a 100% solution. There will always be edge cases and your case is no exception. Some people will and always will prefer to pay by check. In that case, they deserve to have their checks cashed 5 weeks late. For my circumstance, I hated that and preferred to pay online with immediate withdrawal.

Thanks for calling me out!

CharlesB17


Posts:112


04/30/2011 10:20 AM  
Hah. Nice. Yes, self-promotion, but we all self promote things we believe in.
This is true, and IMHO, there is nothing wrong with that!

WePay is also $0.50, not 3.5% and those paying don't have to register for WePay.
Well, we pay about 2.75%. And 50 cents is definitely cheaper.

Ultimately, to address your reply, nothing is ever a 100% solution.
Well, our system is close. The software providers are seeking a better method now. They have created a lockbox solution and this solution posts back to our A/R software and marks the accounts closed, as with the PayPal solution post back to our A/R software and automatically credits the account. It also provides us a means of tracing the transaction in the event of an error. I am not criticizing your solution. Maybe you should contact the creators of MyComPlus software and discuss them using your solution.
JamesP7
(Pennsylvania)

Posts:1


05/23/2011 12:30 PM  
Seriously, cash the check in a timely manner. 6 weeks is way to long. How hard is it to got to the bank and deposit her check. Now she shouldn't be depositing her payment directly, but you need to get on the ball and do your job.
JenniferM10


Posts:0


05/23/2011 7:24 PM  
I haven't seen this within an HOA, but within the business community. What about using a bank lockbox? Residents mail their payment to a special address and the deposits happen automatically.

http://banking.about.com/od/businessbanking/a/lockboxes.htm

I have no idea what the cost would be, but it might be worth looking into with your bank.
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