Financial Reporting with HOA Accounting Software

hoa accounting software
Financial reporting with HOA accounting software ensures legal compliance and homeowner satisfaction with your organization.

After your organization has set up its HOA accounting software and created a budget, the next step to a well-run, streamlined operation is to create financial reports. While a budget is a set of goals for your HOA, reports help your organization stay on track to meet those goals.

Even if you don’t have an accounting background, you shouldn’t be intimidated by financial reporting. Simplicity is the goal. Clear and informative reports will help your HOA move toward better financial health, continued success, and longevity for your organization.

Reports also help the HOA stay compliant with laws and bylaws, keep homeowners informed, and make sure your budget is working for your organization.

Table of Contents

  1. Types of Reports Available in HOA Accounting Software
  2. Stay Compliant With Financial Reports
  3. Create Transparency and Trust With Financial Reports
  4. Financial Reports for the Future of Your HOA

Types of Reports Available in HOA Accounting Software

Financial reports with HOA accounting software
Using a combination of different reports to display different data points will assist your HOA with its financial goals.

There are a variety of reports your HOA should employ to analyze your HOA’s financial situation. They should be used in conjunction with one another to ensure smart financial planning.

Your HOA accounting software will have report templates available for your organization to implement as soon as your bank account has been synced.

General Ledger

A general ledger report will display the history of your HOA’s financial activities. This report, organized by date and account type, should be used to monitor all incoming and outgoing financial transactions.

Balance Sheet

Your HOA’s balance sheet will provide a summary of your HOA’s assets, liabilities, and equity at any moment in time. It calculates assets by adding liabilities and equity. Doing this reveals the financial health of your HOA.

Profit and Loss Statement

A profit and loss statement (also referred to as a financial statement) summarizes the revenues, costs, and expenses from a specified period, such as a month, fiscal quarter, or year. These statements should be monitored carefully to ensure the HOA is not spending more money than it is earning.   

 Account Register

Your HOA’s account register will list all of its financial transactions (both incoming and outgoing) and the status of those transactions. The account register should be monitored to ensure you are spending money that has cleared and not anticipated income.

Budget Report

Budget reports are used to measure projected financial goals. A thorough budget report should estimate your HOA’s anticipated income and spending for the year so that you can plan for improvements, repairs, and other irregular expenses.

Bank Reconciliations

This report will list deposits, withdrawals, and other banking activities associated with your bank account. These are necessary to frequently review to prevent fraud and ensure proper usage of the HOA’s bank account.

Stay Compliant with Financial Reports

Financial reports in HOA accounting software
Clean data and thorough financial reports help your HOA remain compliant with laws, regulations, and accounting standards.

Each state maintains different laws for HOAs. From the frequency of financial auditing to how an HOA may spend its excess funds, compliance with these rules will steer your HOA clear of legal headaches and hefty fines.

Financial reporting also keeps the HOA updated, in accordance with its individual bylaws. Depending on your own HOA’s bylaws, you may need to conduct an audit annually or every few years. Since audits should be conducted by an external CPA, well-maintained records will be essential to a smooth audit.

They will also be less costly if the CPA can do the audit quickly. Performing financial audits are beneficial to your organization regardless of your HOA’s bylaws. Your CPA may find issues that the HOA board cannot see itself.

It is also important that your HOA is accounting using GAAP standards. Your CPA will be able to help you with best practices to follow these rules.

HOA accounting software will keep your financial records updated for you by syncing to your bank ledger. Everything will be ready for your CPA to start your HOA’s audit.  

Create Transparency and Trust with Financial Reports

Homeowners pay dues and fees to the HOA to create a better community. They will want to know exactly how their financial contributions are being spent.

Utilizing financial reporting with HOA accounting software helps distribute the information clearly to the homeowners. It also helps the HOA stay accountable to its homeowners.

Carefully analyzing your profit and loss statement will prevent your HOA from overdrafting your account and asking the homeowners for additional funds to keep the organization afloat.  Not only could this create discord among homeowners, they could also have a case to take legal action against the HOA if their dues were mismanaged or violated the HOA’s Covenants, Conditions and Restrictions.

It will also be beneficial to disseminate the HOA’s balance sheet and budget report to its homeowners. Doing so will create trust that the HOA is on track with its financial goals and that dues are being spent in their intended manner.

Financial Reports for the Future of Your HOA

HOA accounting software financial reporting
Reporting with HOA accounting software is essential for your organization’s financial health and clarity.

The longevity of the HOA depends on good organization and management of finances. Without money, the operation could not exist.

It is not in your HOA’s best interest to work on a month-to-month basis from regular dues. The HOA should monitor its bank reconciliation reports to ensure there is enough money in its accounts to work with.

You must also forecast expenses and consider long-term goals and future events. Analyzing your HOA’s general ledger will help you anticipate future expenses.

Good record keeping begets good reporting, which helps create better predictions for your HOA’s financial success. While no financial report can predict the future, maintaining and publishing essential reports will help you anticipate known patterns and expectations. If it doesn’t have to be a surprise, it shouldn’t be.

HOA accounting software is essential to creating this clarity. It assists with cash flow stability in digital payments and autopay. You will not need to make manual ledger entries or reconcile with the bank account. All of the tedium is taken care of, which means you can devote your time and energy to more complex tasks.

There are many reasons why keeping an eagle eye on the budget is in your best interest. Finances and forecasting are important. HOA accounting software can help you take control of your organization, giving you the clarity to plan for your HOAs goals.

PayHOA provides a centralized hub for all your HOA data, so when you compile reports through our ready-made templates, you’ll get a clear, accurate picture of your HOA’s financial health. 

Over 7,000 HOAs across the country use PayHOA to simplify their accounting. See how easy HOA accounting software can be — try it for free.

PayHOA offers an HOA management software solution for HOAs of any size or managerial priorities. To find out if PayHOA fits all your HOA management needs, try our software free for 30 days.

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