HOA glossary · C
Chart of Accounts
What is an HOA chart of accounts?
An HOA chart of accounts (COA) is an index of all the financial accounts in the HOA’s general ledger. Whether by paper and ink or by software that automates the documentation, it categorizes and lists by line item every financial transaction within a specific accounting period—by the week, month, or year. Specific accounts are typically divided into liabilities (accounts payable, loans, taxes, etc), assets (real property, equipment, bank and investment accounts, accounts payable, etc.), revenues, and expenditures. In some cases, a designation for equity accounts may be needed. Accounts and transactions are identified by name, code, and concise description. COAs should be tailored to reflect a particular HOA’s operations while adhering to generally accepted accounting principles (GAAP).
Why are HOA charts of accounts important?
A well-designed HOA chart of accounts organizes finances in such a way as to give directors, property owners, consultants, and regulators a structured way to understand the HOA’s fiscal strength and health. It provides vital information for filing of tax returns and payment of local taxes and for reports necessary for long-term planning. An HOA’s chart of accounts can also help set short-term priorities, such as pinpointing where spending may be advantageously increased or where it can be readily cut. Keeping the same format in an HOA’s chart of accounts over time assures that month-to-month and year-to-year comparisons are accurate.
How can you use “HOA chart of accounts” in a sentence?
An HOA chart of accounts is a basic financial tool to provide an overview of the homeowner association’s fiscal health.
Related: HOA accounting in PayHOA
Related terms
- Accounts PayableHOA accounts payable (AP) represent money an association owes to suppliers as short-term debts, tracked in its general ledger.
- Accounting Software for Homeowner’s AssociationsAccounting software for homeowners associations helps boards pay expenses, collect fees, generate reports and keep homeowners informed.
- Accrual Method of AccountingThe accrual method lets an HOA record revenue before payment is received and record expenses when they're incurred, not when paid.
- HOA PlatformAn HOA platform is a computer application designed to handle many of the tasks common in administering a homeowners association.
