HOA accounts receivable

What are HOA accounts receivable?

HOA accounts receivable (AR) are funds owed but not yet paid to a homeowners association. Most often these are for dues, fees, and special assessments charged communitywide to property owners but also can be payments for services provided to individual property owners or overpayments to vendors.

Accounts receivable are listed on the HOA’s balance sheet as current assets. While dealing with late payers can be a frustration for HOA officers and/or bookkeepers, late fees can be both a small source of income for the association and serve as a disincentive to paying after due dates. When property owners fail to pay even after repeated reminders, the HOA may seek legal recourse to collect the debt, adding the cost of collection.

Why are HOA accounts receivable important?

Accounts receivable is a standard accounting tool for homeowner associations just as with any other business entity. ARs help track funds due, keeping the HOA from losing money on unpaid fees and assessments. They can also track average payment dates, helping HOA managers or officers determine what property owners habitually pay late and what measures work best for prompting payments.

How can you use “HOA accounts receivable” in a sentence?

Once all of our member dues are paid, our bank account will look as good as our accounts receivable.