As the year comes to a close, there are several tasks that need to be completed, including closing out the books for 2021. This year-end accounting encompasses processing financial documents, balancing ledgers, and reconciling accounts, which are all important factors that can negatively impact your association’s financial standing in the new year if not properly addressed now.
In order to effectively complete these tasks in a timely manner, mitigating risk and ending the year on a high note, here are some of our recommendations.
- Manage vendor documents such as 1099s.Since vendor contracts make up a large part of many HOA’s financial transactions, it is important to have organized records of all important financial and tax documents relating to business with vendors. These allow you to track how much you paid to each vendor, what services were implemented and when, and more.
- Close our your HOA’s accounting books.
To close out an association’s accounting for the year, an HOA must ensure all financial data is current and recorded correctly. This means reviewing with a fine-tooth comb to catch and fix any errors and preparing for a successful tax filing season. Begin by reviewing your income and expense records, collecting any outstanding invoices, and then paying any bills owed to vendors and other entities.
- Review your HOA accounting software (if applicable) and consider consulting an HOA management company.
If your HOA’s board is self-managing, it is a good idea to implement accounting software tools, which are designed specifically for planned communities and creates a streamlined experience for your treasurer. This software also allow you to securely store accounting data and import next year’s budget while zeroing out income and expenses, accounting for changes in dues and assessments, and more.
However, the best service often comes from the integration of an HOA management company, who is skilled and knowledgeable about these processes and can set you up for success in the long run.
For more information, please contact Dominic Cirillo. Atlantic & Pacific Management has over four decades of experience managing HOA communities in San Diego County, making us a perfect choice to manage your community.