As a HOA manager I was often approached by potential clients, at their wit’s end with HOA issues. Often these issues were about finances. When I asked them about their HOA budget, I would often get a response like. “Budget? Yeahhh… I think we have a budget.” In most of these cases there was either no budget at all, or the HOA budget hadn’t been given a second look since the day it was compiled.The HOA budget is more than just writing down estimated expenses. Proper budgeting helps the board be responsible with association funds, and reach their financial goals. Here are some tools and tips that will help your HOA create and stay on budget.

Use the Right Tools

It’s nearly impossible to budget properly without the right tools. And no, an excel sheet is not all that you need. While excel has it’s place and can be useful, every HOA should have accounting software. There are many affordable accounting software options. Software will help you budget, track expenses, and generate reports. But most importantly it will allow you to establish a financial history. A financial history will help you budget more accurately in the future.

Put Someone in Charge

The treasurer is responsible to oversee and report on financials. But what does that mean? Whether the reports are prepared by a manager or not, the treasurer should be doing the three R’s at least monthly.

  • Review and compare expenses: Every expense should be scrutinized to make sure each one is legitimate, watch for mistakes, and make sure the budget is being followed.
  • Reconcile the bank statements: Comparing the expense report with the actual activity of the bank account will allow associations to catch mistakes and fix them quickly.
  • Reports: Creating monthly reports not only give an overview of the financial condition of the association for the board, but it also creates an important record. This record will protect the board and provide valuable information for future board members and treasurers.

Track Your Progress

If you can’t see what has happened in the past years it makes it much more difficult to estimate costs for the upcoming year. Tracking the association progress over the years will allow associations to refine their budget and plan for long term expenses.

Flexibility is Necessary

If you have been involved with budgeting for your association you probably already know that plans change, and unexpected expenses happen. When these variations from the budget happen it’s important to determine if the expense is random or a trend, and make adjustments accordingly.

Burke Nielsen

Burke Nielsen

Founder and Account Manager at GoGladly
Burke is Gladly's top industry expert. After 12 years in portfolio management, Burke founded an HOA management firm, and has drawn from that experience to offer insider-level understanding to Gladly. One of Burke's rare charms is that he actually loves listening to your problems. His more traditional hobbies include camping, 4-wheeling, and spending time with his wife and 5 terrific kids,especially when he gets to nag them about homework (nag the kids, not his wife).
Burke Nielsen

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