10 Questions An HOA Should Ask Before The End Of The Year

10 Questions An HOA Should Ask Before The End Of The Year

Running a homeowner association (HOA) is just like running a business. With projects to execute, budgets to balance, and standards to maintain, an HOA requires a lot of time and energy. That’s why your role as an association manager makes such an important impact on your clients. As an HOA manager, you can help your clients with everything they need for a successful association.

Like any organization, the end of the year means that it’s time for HOAs to settle their business affairs and prepare for next year’s endeavors. As an association manager, you can use your professional knowledge and experience to help your clients “close out” for the year. Review the HOA accounts you manage, then assist the association board with its year-end tasks.

To ensure that nothing falls through the cracks, there are 10 questions an HOA should ask before the end of the year. Use these questions as guidelines for dealing with your clients as the year’s end approaches. These common business questions for HOAs will help you stay on track and lay the foundation for another year of successful association management.

1. Is Next Year’s Budget Ready?

The end of the year is the time to begin planning for the next twelve months. Do your clients’ associations have their budgets for next year ready to go? Budgeting is crucial for the success of an association. The annual budget determines what kind of projects the HOA can complete, how much income it needs to generate, and other important financial factors.

As the current year comes to a close, help your clients create a new budget for next year. Use your online association accounting software to generate financial reports and analyze the HOA’s fiscal health. Has the HOA stayed on a budget? If it exceeded its budget, did you advise the board to dip into its reserves, or are there any outstanding bills that will need to be paid next year? Take these elements into consideration, then assist your clients with their new budget.

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2. Have You Sent Out Your Required Annual Disclosures?

By law, all HOAs are required to distribute annual budget and policy disclosures. However, check with your clients’ state and county laws, as requirements may vary by region. According to the law governing disclosure, HOAs must send out notices 30 to 90 days prior to the end of the current fiscal year.

These disclosures include documents pertaining to the HOA’s budget and its policies. Unless all members of the association have consented to receive these disclosures electronically, the Davis-Stirling Act dictates that all information must be sent via first-class mail, registered or certified mail, express mail, or overnight delivery. As the association manager, you can assist your clients with their annual disclosure requirements by ensuring that all deadlines are met.

3. Did Your Client Elect New Board Members?

Among the questions an HOA should ask before the end of the year, always inquire about new board members. Because you’re a professional HOA manager, not a board member or resident, you can serve your clients by evaluating the association’s leadership. Conduct performance reviews of new board members and help the association understand the best ways to use everyone’s strengths.

If your clients didn’t elect new board members, you can still offer professional evaluations. Additionally, if there are open spaces on the board, you can help the HOA plan an election for the next year’s term.

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4. Has Everyone Reviewed the HOA Rules and Regulations?

As the current year comes to a close, assist your HOA clients by reviewing the community’s rules and regulations. In many ways, an HOA is like a living entity. It grows and evolves depending on its membership, so the rules and regulations need to be periodically adjusted to reflect new changes.

Ask your client’s board members to review the current rules and regulations. Help them assess whether the community would benefit from any changes. Then, assist the HOA with the drafting of new guidelines.

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5. Has the HOA Finalized Major Projects?

Most HOA has major, ongoing projects. Have these projects been finalized? The end of the year is a great time to assess the status of new developments, renovations, and other projects undertaken by the association.

If the HOA hasn’t completed its projects for the current year, you can assist your clients by helping them devise a new completion plan for the next year. Work with contractors or other consultants on the association’s behalf to find out how these projects can be finished on a new timeline.

6. Are There Any Outstanding Invoices?

Next, ask yourself if the HOA has paid all its outstanding bills and invoices. As the association manager, your HOA accounting software can help you stay on top of your clients’ finances. Your accounting software gives you a live, real-time snapshot of all the HOA’s assets and liabilities, as well as accounts payable.

With this information, do a year-end review of the HOA’s finances. If the HOA is owed money, help your clients by following up with collections. For invoices that the association still needs to pay, assess the current financial status of the HOA and either pay the bill immediately or work with the vendor to develop a payment plan for the following year.

7. Have You Helped Your Client Plan for Next Year’s Projects?

When you’re considering all the questions an HOA should ask before the end of the year, consider next year’s projects. What would the HOA like to accomplish in the upcoming twelve months? Have residents asked for new amenities or upgrades to shared spaces?

Work with your clients to find out how they would like to improve their HOA next year. Then, develop a plan for these new projects and help execute them.

8. Is the Calendar Ready for the New Year?

Ask your association management clients about upcoming dates and deadlines. It’s important to create the new year’s calendar before January 1st. By helping your HOA clients plan in advance, you can create business strategies to help manage the association more efficiently. Before the end of the year, make sure the HOA has its new calendar ready to go.

9. Did You Help the HOA Update Its Reserve Study?

An HOA reserve study is an assessment of the association’s financial reserves. This should be done at least once per year and updated accordingly. As an HOA manager, use your online association accounting software to help you assist your clients with their reserve study and management. Complete a reserve study before the end of the fiscal year.

10. Are the Association’s Residents Happy?

Finally, are the association’s residents happy? This is a question you can ask yourself and your clients. As an association manager, you’ll be aware of the community’s daily operations and may be able to offer different insight into the residents’ well-being. Talk to your client’s board members and let them know if the residents seem content with their HOA leadership.

As the end of the year approaches, you can also help your clients plan an annual party or holiday events for residents. This will help endear you to your HOA clients and members of the association’s neighborhood community.

Get Ready for the New Fiscal Year with CINC Systems

As you help your HOA clients prepare for the new year, try CINC Systems. CINC Systems gives you all the tools you need for HOA management and accounting. Request a free demo; call (855) 943-8246.

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