“HOA accountants perform important tasks to keep your financials in good order and keep your HOA in compliance with federal regulations.”
Besides closing out the books for 2019, HOA
accountants perform some other important tasks to keep your financials in good
order and keep your HOA in compliance with federal regulations.
Big deposits from assessment payments account for large cash flows. More than 95% of our clients having an assessment due date on 1/1/20. Accountants monitor association bank accounts so that they don’t exceed the FDIC limit of 250k per institution. When payments come in, CMA transfers funds to interest bearing accounts. CMA staff open an additional association bank account with a different institution in order to stay under the FDIC limit.
It’s also time to accrue for Federal Income Tax based on the investment income earned during 2019. CMA accounting uses its own spreadsheet for a quick calculation to estimate if an amount needs to be accrued. The association’s tax preparer calculates the final tax amount when the taxes are actually filed and reports the amount to accounting. The accrued dollar amount should cover the tax!
Accountants try to fully accrue for all expenses to limit audit entries down the road. For example, they typically make sure landscaping, pool contracts, security and all utilities are accrued. They also inspect invoices in CINC to spot items covering work/service performed in 2019 that must be paid in 2020.
All of the budgets that our managers produce and Boards approve are reviewed and imported into our financial management system so that data is up to date for the new calendar year.
All associations are required to file 1099s and the associated 1096 with the IRS by January 31 of each year. And guess who reviews and prints those forms to be mailed to vendors and the IRS? Our accounting team!
Isn’t it great to have a management company that handles these details for you?
If you found this article helpful, you may also find other topics relevant to your HOA on this blog at Community. Well-Served.
36 Years of Community. Well Served. (www.cmamanagement.com)
Headquartered in Plano, Texas, CMA has three regional offices and numerous onsite locations providing contract management services for more than 250 residential and commercial communities ranging from 100 to more than 9,000 homes.
•Town Home Communities
•Master Planned Communities
•Active Adult Communities