Accounting plays a key role in association account management. When you’re managing a homeowner association (HOA) or condominium association (COA), you will have many financial responsibilities. You may be asked to monitor your clients’ HOA/COA bank transactions, balance their books, process resident fees, and more.
Accounting for HOA/COAs isn’t always the most exciting part of the job, but it can be very rewarding to help your clients stay fiscally healthy. Today, there are also many HOA/COA accounting software programs specifically designed to help you with association accounting. These applications, like CINC Systems, can be customized with unique features to fit each HOA or COA in your portfolio.
How Much Accounting Knowledge Do I Need?
Although it will certainly help if you have a background in accounting and finance, you don’t need to be a CPA to use association management accounting software such as CINC Systems. HOA/COA accounting software is very user-friendly.
To get started with accounting software for your HOA/COA management business, it will help to have some basic knowledge. Familiarize yourself with a few core accounting concepts, remember to be thorough when you add a client’s data, and let the accounting software do the number crunching for you.
Here are some accounting basics that will help you with HOA/COA management, as well as some key features provided by association management accounting software. Learning these concepts will help you manage your HOA/COA accounts more efficiently than ever.
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HOA/COA Accounting Basics
Understanding certain fundamental accounting concepts will help you get the most out of your HOA/COA accounting software. More financial knowledge will also help you assist your clients because you’ll be able to clearly communicate their financial status.
Here are some accounting terms and concepts you should learn:
- Balance Sheets: balance sheets provide an overview of an HOA/COA’s net worth. A balance sheet will list the association’s financial assets, costs, and expenses. When an HOA/COA is in good financial health, it will have a positive balance.
- Income and Expense Ledgers: these ledgers compare how much the association spends with the income it receives. Income and expense ledgers are usually calculated on a monthly basis to help managers understand how the HOA/COA’s current finances compared to its projected budget.
- Check Register: also known as a cash distribution statement, a check register is a detailed account of each check written by the HOA/COA. This will include information such as the date, invoice number, and what the check was written for.
- Accounts Payable: this refers to any outstanding invoices the association may have, such as unpaid bills to vendors and service providers.
- Accounts Delinquency: in contrast to accounts payable, accounts delinquency refers to any payments the HOA/COA is owed. This generally means resident fees that haven’t been paid.
There are many features of HOA/COA accounting software that will enable you to streamline your clients’ finances. The following features of HOA/COA accounting software will make associations easier to manage. Best of all, you don’t need to know professional accounting techniques to make the most of them.
General Ledger Accounting
In simple terms, general ledger accounting covers all the above elements. It combines balance sheets with income and expense ledgers, as well as cash flow, accounts payable, and accounts delinquency. General ledger accounting gives you an immediate snapshot of an association’s financial health.
HOA/COA accounting management software like CINC Systems largely automates general ledger accounting. Although you’ll need to add financial data for your HOA/COA clients, you won’t need to crunch the numbers. The software will do it for you.
Monitor Financial Transactions
HOA/COA accounting software also helps you monitor financial transactions. With a feature called automatic bank reconciliation, you can link your clients’ bank accounts to your association management software dashboard. This enables you to see their accounts in real-time from one convenient place, rather than having to log into multiple bank websites.
By monitoring financial transactions, you can ensure the association stays within its budget. This will also reduce the risk of fraud.
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Process Resident Fee Payments
Processing resident fee payments is another great feature of HOA/COA accounting software. With software such as CINC Systems, you can create online web portals where your clients’ residents can pay their association dues automatically.
This streamlines the payment process for everyone involved. Residents can make easy payments via credit card or e-check, which are automatically deposited into the HOA/COA’s account. This saves you a trip to the bank to process paper checks.
Additionally, processing resident fees online means that your list of accounts delinquency is maintained by the software. This makes it more convenient to contact residents with outstanding dues.
Pay Invoices Online and Automate Bills
Similarly, using HOA/COA accounting software gives managers the option to automate bills and pay invoices online. This cuts back on your paperwork and streamlines the organization.
Association management accounting software allows vendors and service providers to submit invoices electronically. You’ll see bills and accounts payable appear automatically. Simply pay them with the click of a button.
Generate Financial Reports
When you manage an HOA/COA, there will be many occasions where you need to provide your client’s board with a financial report. The association board uses these reports to file taxes, conduct internal audits, set budgets, and more.
Prior to the development of accounting software, creating a financial report for HOA/COAs could be very time-consuming and require a lot of accounting knowledge. With accounting software, however, you can generate reports automatically. These reports can be customized to specific dates, income/expense categories, or any other variable.
Try CINC Systems Today
Try CINC Systems today and see how HOA/COA accounting software can help you manage your clients’ associations. You don’t need to be a financial wizard to use CINC Systems. Call (855) 943-8246, or request a free demo.