Managing Cashflow for Community Associations

The highest use of a community association manager is as an experienced, certified professional who eases the burden on volunteer board members with expert guidance and hands-on management of administrative, financial and maintenance tasks.

As a percentage of overall responsibilities, the financial piece is substantial and critical. It’s also one of the first reasons community associations seek a management company. In addition to budgeting and planning, there are dues to collect, frequent expenses to pay and reserves to be accumulated and protected. All of the above require transparent documentation for accountants or auditors.

Whether a manager has 500 doors or upwards of 20,000, financial account management alone can consume an inordinate amount of time and energy without the right tools in place.

Job One is to find a software platform and a relationship with a bank that offers a dedicated professional experienced with community associations and systems that fully integrate with your chosen software.  There are various levels of integration, and some require more manual steps than others. The more manual steps, the more room for error and less room in your schedule for other important responsibilities.

The process should be automated and seamless, with four major features:

• Lockbox validation and payment matching. No matter the adoption rate of electronic dues payments, there’s always a portion of residents who pay by mailing a check. Making sure that check is deposited to the correct account is critical, so find a system that can use lockbox validation information such as the account owner’s address to make a match even if the exact name or account number isn’t on the check itself.
  
  
• Payment transactions and payment integration. This is an important feature. Find a software-and-bank combination wherein the bank pushes a file directly into the software. Better yet, some platforms allow for reconciliation between the bank data and your software in real time, with an image of the payment that allows the matching feature to identify and reconcile any misapplied payments.
  
  
• Transaction and auto-reconciliation. Ensuring accuracy between your ledger and the online banking system is critical. Opt for the best integration that you can get. A top-tier feature is automatic reconciliation that lines up what’s deposited at the bank against what’s on the check register to get the most accurate alignment. Automatic reconciliation virtually eliminates manual steps.
  
  
• Bank statements and auto-import. Instead of waiting for mailed copies, expect online statements. Some integrations offer statements on the first day of the month so there’s no delay in closing out the previous month’s financials and preparing packages for your boards.

Those are the key things to look for in a banking integration that will save you time, energy and headaches when it comes to receivables and payables.

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