Closing out 2021 Successfully: End of Year Tasks and Closing the Books

The holidays are a time for loved ones, not hunching over accounting ledgers like a Charles Dickens character. Yet good HOA community management practices include certain year-end accounting tasks, such as processing financial documents, reconciling accounts, and balancing your ledger. All of this is important and can impact your association’s finances in the new year and beyond.

The question is: How do you complete these tasks as efficiently and painlessly as possible?

Ideally, you will handle these end-of-year tasks like a pro and close the books on 2021, averting unnecessary risk and leaving your community with cause for good cheer.

Understanding how to manage each task to close your accounting—and having the right tools at your disposal—can help you to round out a period of healthy HOA community management and set your sights on the new year.

HOA Accounting Software for HOA Community Management

If you’re managing your own HOA community, or considering switching to a self managed HOA, you may have heard about HOA accounting software.

HOA software offers tools designed specifically for planned communities like yours—as opposed to more generic products focused on individuals and small businesses, like QuickBooks.

HOA software also comes at a fraction of the cost of hiring a third-party property manager.

·        Property management companies can charge tens of thousands of dollars per year in unit fees and other charges.

·        Boards can self manage an HOA community’s finances for as little as $50 a month.

Using software geared specifically for HOAs creates a streamlined experience for your treasurer, so they can handle finances and other HOA community management tasks, as well as manage important community data and communication with residents, all from one central hub.

With these software tools and the right know-how, here’s a closer look at how to close your community’s year-end accounting and kick off the new year with your HOA’s best foot forward.

Table of Contents:

1.      Check These Tasks Off Your 2021 To-Do List

2.      Don’t Forget Your Vendors

3.      Close Your HOA’s Accounting Books

Check These Tasks Off Your 2021 To-Do List

Starting the year fresh means resolving financial transactions, putting the finishing touches on next year’s budget, reconciling bank accounts, and generally getting your financial records in order. Billing for projects and resolving invoices should be a top priority as well.

Some of the key data you should gather and organize include income and expense statements, balance sheets, business receipts, accounts payable reports, accounting ledgers, account delinquency reports, and an inventory of materials and supplies spending for the year.

Setting next year’s budget is an HOA community management task you don’t want to put off. It takes a lot of planning to build a healthy financial roadmap for your association. Ideally, you should set your budget as far ahead of time as possible.

HOA accounting software lets you build and manage a budget easily and intuitively with ready-made templates and the ability to customize your chart of accounts and copy data from one financial period to the next.

HOA software keeps a data trail of all financial records and reports, as well as other files and documents you store in a secure digital repository, to reduce risk and increase transparency.

You’ll need to reconcile your accounts, meaning to check the income and expenses data in your HOA accounting software and make sure it matches up to your monthly bank statements. Your software automatically syncs with your operational and reserve bank accounts, and you can easily access your data to reconcile your accounts.

Don’t Forget Your Vendors

Vendor contracts make up a major part of any association’s financial transactions. When you’re closing out the year, it’s critical to determine which vendors will receive 1099s and which must complete up-to-date W-9s. Also, ensure you have current information on all vendors including insurance information.

Keep and organize copies of all important financial and tax records with vendors as well. These records help you track how much you paid each vendor for the services they rendered and other important information.

HOA accounting software lets you securely store critical vendor data, including contracts, reports, and insurance and contact information, so you can quickly and easily access it anytime from an easy-to-search digital repository.

Close Your HOA’s Accounting Books

Closing your accounting means making sure your finances are up to date and recorded correctly at the end of a year, fixing any errors, and setting yourself up for a successful tax filing and new financial period.

First, ensure your income and expense records are up to date and properly recorded in your HOA accounting software. Be sure to collect any outstanding invoices to help you complete this process. Similarly, pay any bills owed to vendors. Check your fixed assets and determine their depreciation.

You can use your HOA accounting software to securely store all your accounting data for the year and import your new budget for 2022. Use your software to zero out income and expenses, accounting for any changes in dues or assessments. The net income for the year will now become equity.

Finishing these end-of-year accounting tasks with your accounting software lets you meet your HOA community management goals for this year and beyond.

Storing, accessing, and customizing your accounting data each year is easy with HOA software. No accounting background is needed. Having access to customizable financial reports and real-time analytics lets you track the financial health of your community year-round.

PayHOA’s holistic software tools help HOAs tackle everything from day-to-day financial management to complex tasks like year-end accounting.

PayHOA is an industry leader in providing HOAs superior accounting software tools to meet and exceed the needs of any association treasurer, from the seasoned accountant to the motivated newbie. Over 7,000 HOAs across the country trust PayHOA to help make their neighborhoods a better place to live, and 98% of our users recommend PayHOA.

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.