Preparing Your 2023 Budget with HOA Accounting Software

Summer has passed. Believe it or not, 2023 is right around the corner. As the leaves begin to change, it is a great time to get started on your 2023 annual budget. This is a big job, but HOA accounting software will help. 

An annual budget is key to an association’s financial plan. By creating and adhering to a realistic and well-thought budget, the HOA can prepare for unexpected expenses, determine the cost of dues for members, and predict revenue for the coming year.  

Starting and maintaining an annual budget is a difficult task, especially for a volunteer Treasurer. People join the board with a variety of backgrounds, experiences, and skills and financial management may be new to them. This blog outlines some helpful methods to prepare for next year.

Creating a budget

Looking to the past is the best way to predict the future when it comes to financial planning. Analyzing the past three to five years will provide a solid foundation to build your 2023 budget. 

Maintaining your records through HOA accounting software helps keep things organized. PayHOA’s software is designed especially for HOAs. It automatically syncs ledgers to the HOA’s bank account. Automating financial management frees up the Treasurer’s time and decreases errors.

Information is stored in the cloud, eliminating the need to email reports or print paper copies. Nothing is lost. PayHOA’s software makes transitions on the board of directors seamless by keeping all important information up to date and organized. 

Looking at past years can give you an idea of what you can expect to spend in the coming year. After this number is calculated, factor in any special projects or upgrades the HOA plans to complete in 2023. 

Some other steps your association should take to create a budget for 2023:

1. Evaluate New Year’s homeowners’ fees and budget within the limits of expected revenue. Adjust fees as necessary. 
2. Ensure insurance is up-to-date and budget for it as necessary.
3. Review contracts with vendors to determine if the HOA is getting the best value for their money.

Managing the budget

A budget is a great tool for planning the year’s finances, but it’s only helpful if it’s followed. Board volunteers must understand when and how to use financial reporting to continuously check that they are on track with the annual budget.

Smart financial sense makes members trust their HOA. HOA accounting software can help you adhere to the annual budget. PayHOA’s software features reporting and charts to help ensure your HOA stays on track with the budget. 

Reports that help manage a budget:

• general ledger
• balance sheet
• profit and loss statement
• account register
• budget report
• bank reconciliations

Using HOA accounting software reduces workload. Volunteers no longer have to manually enter transactions, banking data, and formulas to get desired results. This makes managing the budget easier and less prone to mistakes. The financial reports are up-to-date and ready anytime someone wants to pull them. 

Staying compliant

Not only is creating a budget a necessary tool for successfully managing an HOA, but it also helps you stay compliant with government regulations. The Treasurer should be aware of laws in your area and customize the HOA management software to monitor accordingly. 

Being organized in preparation for an audit with a CPA will save the HOA money and time. Good HOA accounting software allows a Treasurer to easily manage finances without an accounting background and ensures the association is organized and prepared for an audit at any time. 

Increasing trust with transparency

It’s normal for homeowners to want the HOA that manages their neighborhood to be transparent about their business. Homeowners’ dues are a main source of revenue for the HOA. Members want to know how their money is being used. Using HOA management software lets you share financial reports with your members and keep them updated on the financial health and plans of the association. This builds between community members and board volunteers. 

Having HOA accounting software that automatically updates and is available at all times to members and volunteers helps people become more engaged with the HOA and its finances. They no longer have to wait for a meeting or request a report from the Treasurer to receive an update on the financial status and plans of the association. All of the information is stored within the software for easy and convenient access. 

Getting the most out of HOA management software

Many volunteers are overwhelmed with the tasks it takes to self-manage an HOA. This causes boards to decide to hire a third-party management company. A third-party company simply doesn’t care about the community the same way someone who lives within it does. 

The right HOA management and accounting software can eliminate this need and empower volunteers to take ownership and successfully self-manage the HOA. This will save your HOA thousands of dollars, and also ensure that those managing the HOA truly have its best interests in mind. 

Not all software is created equal. There are some important qualities to look for when selecting the right HOA accounting and management software. 

1. Comprehensive database—software like Excel and Quickbooks may allow information to be lost or entered incorrectly, and increase workload. A central hub for all things HOA helps you organize and streamline your operations.
2. Robust reporting—HOA-specific accounting software provides reports tailored to the unique homeowner-HOA relationship.
3. Accessibility—HOA software should be intuitive and easy to use. This increases trust and member engagement with the operations of the HOA. 
4. Customization—software should be customizable to your association’s unique plans and needs.
5. Versatility—HOA accounting software should work for every member, including those who prefer paying dues with cash or check. PayHOA can collect and deposit physical checks and update records without additional work. 

Transitioning to HOA accounting software

Although using automated and comprehensive software sounds like the right move for your association, it’s natural to have reservations about what it will mean to undergo this kind of change. You may worry about the amount of work it will take to transfer all of your data into the new software. Fear not, HOA accounting software can work with other tools and receive data from your current method automatically with the click of a button. 

Successful financial management is the key to a long-lasting association. Being prepared for expenses both expected and unexpected ensures that your HOA will keep running through the good and the bad times. HOA accounting software simplifies and automates tasks so that your HOA can run smoothly and error-free while board members spend their time solving more complex problems and planning for the future. 

PayHOA’s HOA accounting software provides a hub for everything, accessible to volunteers and members wherever they are. The software tracks violations, completed and requested work orders, and even allows homeowners to set up autopay for their dues, significantly reducing volunteer workload in sending invoices, collecting payments, and updating records. Homeowners and volunteers have access to the same records, reducing the frequency of miscommunication and disputes. 

This comprehensive HOA accounting and management software offers various options for communication between board members and homeowners, including newsletters, discussion boards, and scheduled texts, emails, or phone calls. HOA accounting software can do so much more than just manage your HOA’s money.

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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.