5 Golden Rules Of Association Accounting!

By Author: James Raj
Total Articles: 2
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Financial Governance is the most important Pillar of any Association. The government is in trouble for poor financial governance. An association without robust financial governance becomes a hotbed of corrupt practices. These practices cause the property to fall into disrepair.
Ultimately the Property loses the full amount of both Rent and Sale value. How to use accounting knowledge to your advantage in community building.
1. Sacrosanct process of Maintenance Invoicing - Association Accounting
An association isn't really an organization that you understand. Many associations often do not have the right structure for its members to be able to fully understand how things work and it is only when the owners are informed about the details of what is going on with their own building that the association becomes better able to help them achieve the outcomes that they desire.
A potential conflict of interest arises if an organization is involved with Owen, as he is the owner. However, the best way to resolve any possible problem is to simply avoid having anything to do with Owen.
This is the most important ...
... activity of the Management Council. It’s how the management council supports all its other activities.
The Owner of the Team needs to have a strong operational experience in order to motivate the MC. All Owners are obligated to pay a fixed monthly maintenance/reserve fee or quarterly. The Billing for this does not wait for any particular service completion.
Automated bills are an important component of any financial management system. These are essential for any association which processes recurring payments. They should be as accurate and efficient as possible to ensure that they are on time and error-free.
Every Payment method provided to Residents
In an average community, about 30 to 40% of units are rentals. When tenants live elsewhere, it may mean they don't spend as much time in their apartment or condo as others who live in the community all year long. Tenants also have a global and traveling lifestyle.
It's essential that all methods of payment are open to the owners and tenants.
By using the Online Provision of Receipts and Online Payment, ADDA helps reduce late payments by as much as 62% for the Owners/Tenants of the properties they manage, while reducing the amount of time Owners/Tenants spend chasing rent.
If you're serious about business, avoiding cash is a good idea. It makes sense to avoid cash for many reasons, but primarily because of the cost of handling it.
In addition to the high operational costs associated with banking, accounting and reconciling cheques, it’s hard to audit them.
It’s difficult to bounce cheques these days. They can bounce or be blocked. If you get a bounced cheque or a letter stating that someone has blocked your cheque, it is possible to get it unblocked.
Besides, for most payments Paypal is now obsolete. Many Tenants/Owens have forgotten how to write Paypal cheques and result in back-n-forth to get the cheque right!

All Purchases recorded
Over the past two years, the ADDA team has been privileged to witness the election of more than 150 new Board Directors.
The Topic that get all AGMs heated up without fail, are Controversial Purchases – Purchases with high Ticket Values, UnBudgeted Purchases, Purchases with insufficient Due Diligence
With strict purchase discipline in place, the money that you’ve saved is invested back into your business.
We have witnessed many MCs as well as management companies getting into contact with their clients and employees on social media platforms.
in AGMs to answer Questions on Purchases Received, Purchase Orders etc.
Having a System that tracks the complete Purchase Workflow till the Payment, in a SINGLE online place is a must for Associations that need to have tight control on costs.
The process must capture all Interactions and Documents (e.g., Proposals from Vendors, Invoice, Payment Voucher etc.) and show them for each Purchase.
Advanced MC / Associations can go even further up the process and use a robust Budgeting process, alerts on exceeding budgets etc.
Good-Bye to fumbling in your inboxes in your AGMs. ADDA’s “Expense Tracker” has nailed the entire process of a request for authorization for expenses
Hello to “bang-bang” answers in AGMs or Auditors!

TDS – Tax Deducted at Source
This is an important topic that every self-managed association must address.
In this situation, the association is best served to contract an accountant to handle its bookkeeping services.
As a result of this, payment to vendors are done without deducting any tax or relevant deductions.
The MC has to account for the income of the company and pay the tax. It is very difficult to trace all of the transactions which have been done by the various Vendors.
In the end, the Ultimate Hockey Association will pay all the taxes out of their own pockets.
This is a avoidable loss for the Association. It's very very common! It also happens when an Association hires professional accountants and they don't understand the basic rules of the game.
They often wrongly assume that the Association has no tax implications in all aspects.
Our ADDA software allows users to run a tax compliance system, and it supports multiple countries. We've developed tax rules for each country, and there are tax experts who you can contact to help set up your tax compliance.

Bank Reconciliation done every MONTH
The bank statement is the ultimate truth of financial transactions. 2 .
If you’re a regular user of an online banking service, there are three things that you need to do to ensure that all your transactions are being reflected correctly in your bank statement.
Let’s see an example. A: A customer with an outstanding balance of 10,000 is sent a notice of cancellation by a company with a 1% cancellation fee.
B: 2,000 due to manual error is the answer. When the bank reconciles the account, the statement shows 20,000 for the cheque that’s 20,000 in the accounting system.
When you need to make an entry in the Accounting System, correcting it is quite quick.
Without Bank Reconciliation, the Accounts Reports will be flawed. In turn, it can lead to bad decisions in the business.
You can’t imagine the misuse of funds in your business until it happens to you.
It's quite common for Site Staff to mis-use Petty Cash. To avoid such abuses, the Association can institute a well-known Reciprocity Principle.
BONUS: All the above done in ONE Integrated Billing + Association Accounting system
Hey, this is a shameless Plug for ADDAbooks+! But you know this is true.. If there can be one system that can do all these things for you and can help you build a Community Management program, it’s a no brainer to use it! A:
A community accountant will walk you through all aspects of community accounting so you know you're ready to take that next step. The Accounting is scattered on multiple systems, Community Portal, Tally, ExcelSheets etc.?
We don’t know about your community accounting needs, but if you have them, we can help. ADDAbooks+ is available to you at no additional cost!
Migration to Amazon is free for any active Financial Year.
Call us for a Complimentary Consultation for revamping your Accounting Process - with or without ADDABooks+.