Association management involves many different functions, among which one of the most important is accounting. An HOA management company is accountable to the board and the owners, and must therefore be diligent and transparent, particularly when it comes to managing finances. That said, this critical function is not without its challenges. Below, our experts share the top three HOA accounting difficulties and how to overcome them once and for all.
One of the most common and frustrating accounting challenges HOA management companies deal with is the time-consuming task of manual data entry. Furthermore, in cases where multiple different systems are in play, there is also a significant duplication of work involved. These inefficiencies then spread to other areas of the business. Furthermore, it’s a waste of human capital and can lead to employee burnout and subsequent turnover.
Solution: Centralized, Paperless System
HOA management software is designed to encompass all necessary functions of association management, one of the primary being accounting. With this type of platform, all data is stored digitally and in one central location. No more toggling between multiple systems, chasing down missing paperwork, or manually inputting data and compiling reports. This one change can cut the time spent on accounting activities from days and weeks to hours or even minutes.
Problem: Inaccuracies and Errors
If one thing is necessary for a successful accounting function, it’s accuracy. One transposed number or misplaced decimal point can result in serious backlash that can negatively impact your financials and tarnish your HOA management company’s reputation. Unfortunately, when accounting is comprised primarily of manual efforts, the risk of costly mistakes is unavoidable. And where there are errors and inaccuracies, there are almost always audits as well. Simply put, it’s a recipe for disaster.
What software robots lack in terms of the ability to reason or react cognitively, they more than make up for in rapid, error-free work. For instance, with an HOA management software solution that offers built-in automation, all incoming invoices can be received, reviewed and processed without the need for human intervention. All that’s left is approval, and then payment can be processed and all documentation securely filed away for compliance purposes. Quick, easy and error-free.
Problem: Lack of Oversight
An HOA cannot be managed effectively without an adequate understanding of its financial health. But when information is stored on multiple different systems, it becomes increasingly difficult to get a clear picture of where things stand. And when you can’t gain insight into your current financial situation, it will be nearly impossible to forecast, plan and prepare for the future. All of this can lead to board dissatisfaction and ultimately a loss of business.
Solution: Single Pane, Smart Insights
When all of your relevant numbers are contained within one single solution, it becomes infinitely easier to see the big picture at a glance. HOA management software can help you maintain a timely and accurate visibility into your association’s current financials, while built-in data analysis and reporting will enable you to make more informed decisions about the future. This will instill confidence and make your business more stable.
Accounting for home owners associations isn’t always easy. Fortunately, the three common challenges above have very easy solutions. By utilizing HOA management software, you can streamline your accounting functions and keep the financial fitness of your associations in optimal condition. This will, in turn, improve customer retention and facilitate additional growth in the future.