Financial Health Tips for Your HOA
Maintaining your HOA’s financial health—just like maintaining your personal health—boils down to moderation and good decision making. Eating one deep-fried blooming onion every once in a while isn’t a problem. Eating three or four several times a week is.
To keep your HOA financially fit, start with these four “health” tips:
1. Separate financial duties. Keeping responsibilities for receipts and deposits separate can help prevent financial mishandling. A good community management company will have the staff to segregate these duties.
2. Obtain the right insurance coverage. Your HOA needs to have a variety of insurance coverage. This includes:
- Casualty insurance to protect common areas
- Liability insurance in case of legal action
- Excess or umbrella coverage
- Coverage to protect directors and officers from personal liability while they are fulfilling their HOA duties
- Fidelity insurance in case of theft
4. Conduct audits on a regular basis. A CPA should do an in-depth analysis of your financial records and documents regularly, usually on an annual basis. If yours is a smaller HOA, you may want to opt for a less in-depth (and less expensive) review.
These guidelines provide a starting point. However, partnering with an experienced community management company in Arizona can go a long way in keeping you on the right track for your short- and long-term financial health. Find out how. Contact FirstService Residential, Arizona’s leading community management company.