As a community developer, you may be looking for a professional team to handle the financial responsibilities of your new community. Professional management companies can manage various aspects of your community, including financial management. Here’s how community management services can help maintain or improve the finances of your association:
Financial-only Management
Management companies may provide only financial services for community developers who don’t need their full range of services. With this service type, you can still control the daily tasks and take care of other issues, such as repairs or homeowner questions. The financial management company will focus solely on the financial needs of your community, which may include taking payments from homeowners for association dues, paying vendors, reconciling bank statements, or planning next year’s budget. The ultimate purpose of financial management is to keep the association profitable.
Daily Financial Duties
Management companies can create reports that show which homeowners have paid their association fees, who still owes money, and how much is outstanding. These companies may provide an online payment portal, making it more convenient for homeowners and potentially decreasing the number of delinquent payments.
Community managers can also take care of bills owed by the association. They may handle vendor invoices, pay utility bills, mortgage payments, and other bills. Management companies can manage all the accounts payable, keeping the association’s finances on track. The community manager can also handle payroll if your community has employees, such as a maintenance team. They can issue employee payments, manage tax forms, and submit quarterly payroll taxes on behalf of the community. The management team also keeps records of all revenue and expenses to file taxes for the community each year.
Long-term Financial Responsibilities
Community managers can develop annual budgets based on previous records and forecast analysis. Management teams will look at current data and trends to develop a reasonable budget for the community. They may review insurance policies and make recommendations based on any changes in the community. The manager may receive quotes to find the most cost-effective policy that meets state and local requirements and protects the community.
If your association has a board, you may need to present them with the annual budget for approval. Management companies can take recommendations from the board and incorporate them into the budget. Once the budget is approved, the management team’s job is to oversee its application. They then monitor expenses to align them with the approved budget allotments.
Community managers can show your association where you can make financial cuts with the least impact possible on the association or homeowners. The management company can look for ways to reduce costs. This can include receiving bids from various vendors before hiring one. These vendors might consist of lawn care, landscaping, maintenance, and repair companies. Community management companies also help with future financial plans for the community association. If you plan to update amenities or have significant repairs, a management company can show you how to save for those goals. Future planning can also include replacing an existing amenity or updating the apartments with new technology.
Financial Reporting
Creating financial reports is another valuable service performed by management companies. These reports can help you stay updated on the current status of your association or community. Management companies can create balance sheets that provide a quick snapshot of the company or association. They include a list of the assets and liabilities as they stand at one point.
Financial reports can also show you the balances in the community’s bank accounts, current amounts owed by the association, and any money being invested. A monthly income and expense worksheet shows you year-to-date totals for your expenses and all the money coming in. It also breaks the totals down by month to help you recognize trends. You can request a projected income report or a cash flow report from your financial management team that shows you how much revenue you can expect next year or even further into the future.
Experience the Financial Benefits of Hiring Community Management Services
Management companies can offer valuable financial services, including financial reporting, analysis, planning, and daily oversight of the community. They can assist with the association’s short-term and long-term finances and manage the annual budget. Contact a community management company today to learn more about their financial management services.
