One of the most important jobs of an HOA manager is maintaining a balanced budget. Accountability and transparency for every dollar spent are critical to a successfully run community. Fortunately, financial management doesn’t have to be a major hassle. Here are some steps to help you stay on or below budget every time.
Get Up to Speed
The first step to managing an HOA budget is to gain a clear and accurate understanding of what money is going out and what’s coming in. This will help you determine your community’s financial position so you can plan accordingly for current and future needs.
Ensure Timely Payments
Next, you’ll need to make sure all community members are remitting their HOA payments on time. Without this, you’ll find yourself scrambling to cover maintenance and improvement costs when the time inevitably comes. (Tip: Utilizing property management software with an online payment portal can streamline this process.)
Develop a Realistic Budget
Upfront budget estimates are required for accurate annual planning. Of course, as the word indicates, these are just estimates. There’s always a chance that projects may end up costing more than initially anticipated. Using past budgets can help you better plan for future needs and get a more accurate idea of where and how much to allocate.
Choose Contractors Wisely
Investing the time to carefully select high-quality, reliable and reasonably priced contractors will pay off tenfold in the long run. That way, if and when an issue arises, you’ll already have a list of pre-vetted vendors on which to call. But remember – you don’t have to stick with this list forever. In fact, conducting an annual audit and getting new bids is not only a good idea, but strongly recommended.
Once a project is completed within your community, don’t just put it to bed. Spend some time reviewing how things went and whether you were able to stay within budget. (Tip: These detailed analyses will also be useful when developing future budgets and evaluating contractors as well.)
A healthy financial status is the sign of a strong, sustainable community. The five tips above should help HOA managers keep their budgets in check, their communities running smoothly and their residents happy.