HOA Budget Preparation Tips
1
Update year-to-date (YTD) numbers for expenses AND revenue to confirm they are tracking as expected/confirm if there is anything unexpected that needs to be accounted.
Be on the lookout for any expenses that increased above what was anticipated budget to actual. Review revenues closely and follow up with any outstanding dues or assessments to minimize revenue shortcomings. This is an excellent time to review collection procedures to make sure they are working for your organization. Be sure to review the proposed budget with the year to date budget AND actual financials for the past 3-5 years.
2
Reach out to all utility/insurance/service providers to determine if estimated rates for next year’s services are reasonable.
Reassess services and vendors where applicable to determine if you can increase efficiencies and decrease costs.
3
Be sure to separate any non-recurring or discretionary items from the operating budget.
These are items that may be included in the budget for a particular year, but not expected to be annual expenditures. Likewise, any one time income (ie: special assessments) should be accounted for separately from operating income (regular annual dues).
4
Check in with your reserve balance/reserve goals if applicable as well as your organization’s 5 year plan of potential major projects/expenses.
Perhaps the timing of these projects have changed, something needs to be taken care of earlier or could be pushed back to a later year.
5
Update year-to-date (YTD) numbers for expenses AND revenue to confirm they are tracking as expected/confirm if there is anything unexpected that needs to be accounted.
Share proposed budgets with board of directors and members to get feedback.