Budget Better with HOA Management Accounting Software

HOA management accounting software can help improve digital collection rates, boost revenue, and provide analytical insights that lead to better financial decisions for communities.

One major benefit of switching to HOA accounting software is that self-managed associations can forgo hiring a third-party property manager—with a potential savings of tens of thousands of dollars in unit fees and other costs.

In fact, self management continues to grow more popular among HOA boards across the United States. Between 30% and 40% of all HOAs are self managed, according to a recent study by the Community Associations Institute (CAI).

There are many reasons to self manage, even for some communities with 100 units or more. Self management provides more community control, better communication with residents, and increased savings that are passed on to homeowners in the form of lower dues.

Perhaps the best reason to manage your own neighborhood is that HOA software is easy to use and provides tools to maximize financial outcomes. That’s because it provides a holistic, centralized, user-friendly approach to financial and community management at a fraction of the cost of hiring a property manager.

Yet the benefits extend beyond reaching short-term, day-to-day goals. Once you reap the savings and improved collection rates that a digital billing and accounting system provides, HOA management accounting software helps you budget better and provide the most value for your residents.

Here are some of the many ways to capitalize on the benefits of HOA management accounting software.

Table of Contents:

1. Issue a Refund to Homeowners?
2. Growing Your Reserve Fund
3. Investing in Special Projects
4. A Note about Surpluses
5. The Bottom Line on HOA Management Accounting Software

Issue a Refund to Homeowners?

With the right HOA software to help you budget and collect dues and fees digitally, you may find yourself in a position to pass the savings to homeowners. But the question is whether it’s wise to issue refunds, for example if a special assessment project comes in under budget and there’s a surplus.

Generally speaking, the answer is no—that money can often be better implemented in other ways, especially if the overestimated amount isn’t a significant percentage of what you assessed. For instance, there may be other areas of your budget that could benefit from increased funds.

The savings of switching to HOA software may also let you set dues at a rate that’s affordable enough to please homeowners while still bringing value to the community.

Note: In some states, refunds for homeowners may be required by law, and funds assessed for a project must be used in specific ways. It’s important to act according to your unique circumstances and rules governing your association.

Growing Your Reserve Fund

Keeping up with an HOA’s reserve fund is a crucial part of maintaining a community. While your main operational fund will cover the day-to-day needs of the neighborhood, unexpected maintenance and other needs will arise. If your reserve fund is underfunded, it may mean passing the cost on to homeowners when an unexpected cost arises.

You may also want to use those funds to invest in things like landscaping, new construction, or renovations, depending on your regulations and bylaws.

Coupled with having a regular reserve study done by a CPA, HOA management accounting software can provide tools to manage your operational and reserve accounts digitally, syncing to your bank ledgers for real-time accounting and financial reporting.

Investing in Special Projects

Making the right investments in the community can increase property values, keep residents happy, and attract more potential buyers. Here are a few examples of how surplus funds can be used to grow value.

Adding amenities: There are countless options when it comes to what amenities might be attractive to residents and improve home values. HOA management software allows you to send mass communications via text, email, or telephone, so you can stay connected with residents’ needs. You can also use it to conduct electronic surveys and voting, when considering what upgrades to the neighborhood might be most popular. 

Some potential amenities include community pools, gyms, clubhouses, playgrounds, dog parks, security equipment, and personnel.

Improving existing spaces: There are many ways to improve existing spaces in your community and make them more attractive and valuable. 

For example, it might be useful to improve lighting along roads and walkways, in parking lots, and on the exteriors of buildings, or to repair sidewalks and trails. Major landscaping and even pressure washing and a fresh coat of paint can go a long way. 

You can also add amenities such as electric vehicle parking and free internet access at community buildings, making them more attractive for bringing residents together.

A Note about Surpluses

It’s important to always consult your CPA when it comes to surplus regulations and taxes. While a surplus won’t hurt your association’s status as a nonprofit, keep in mind that you may be required to pay a higher tax rate on taxable interest income. You’ll also be required to report a surplus in your annual reports and other correspondences with homeowners.

HOA management accounting software stores all your financial data in a central, secure, and easy-to-search digital repository, with user-friendly budgeting and accounting tools, so you can plan how to best manage a surplus.

The Bottom Line on HOA Management Accounting Software

HOA accounting software offers financial management tools to budget better and drive revenue, so your communities can thrive in a self-managed environment.

Features to help you achieve this include:

·        Access to outstanding balances, recurring charges, and homeowner information for each unit

·        Filter tags for easier searches

·        Homeowner access to unit data and electronic dues and fees payments

·        Dashboard analytics such as invoiced vs. collected revenue and cash flow summary

·        Bank ledger syncing for over 15,000 financial institutions

·        Income and expenses chart of accounts

·        Budget builder template with customizable categories

·        Transaction ledger for outside transactions

·        Financial reports such as budget vs. actual and other cash or accrual reports

·        Board member custom access to financial reporting

·        Dashboard analytics such as invoiced vs. collected revenue and cash flow summary

·        Electronic scheduling of bulk invoicing and direct payments for dues and fees

PayHOA offers software solutions to manage your HOA easily and effectively. Our expert support team loves helping our customers find unique solutions to their unique challenges at no extra cost. That’s why over 6,000 HOAs use PayHOA to make their communities better across the country.

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.