When one company has the ability to handle all your Property Management needs, including Association Management, HOA Accounting, and REO Maintenance Services, our clients discover that one call to PO Solutions is quite often the last property management call they ever have to make!
What kind of HOA Accounting does your association currently utilize?
Accrual Basis of Accounting
This is quite often the choice of larger associations, primarily because it gives a broader, more comprehensive view of your association’s financial position. If your association’s HOA Accounting based method aligns with standard GAAP practices, your financial balances will be based on the financial charge levied, instead of when the charges are actually fulfilled. Usually, this method would be accompanied by a prepaid assessments list, an accounts payable list, and an aged assessments receivable report. These documents would effectively fill in the gaps of the accrual method, while allotting for a more extensive explanation regarding actual funds exchanged.
Cash Basis of Accounting
This is a literal, face-value method of HOA Accounting. The numbers on the page change when and only when money changes hands. So revenues of the association would only be reported when received, not when they were charged. Similarly, expenses would only be reported when they were fulfilled, not when they incurred. This kind of reporting, while more literal, might limit your view of the actual expected financial situation for your association. It might be best summarized by this statement: an accrual basis of accounting is a looking-forward method, whereas a cash basis of HOA accounting is a looking-back method.
Modified Accrual Basis of Accounting
And like any other good compromise, because some clients enjoyed some aspects of both the Accrual Basis and the Cash Basis of Accounting, the Modified Accrual Basis of Accounting was birthed. Usually, this method employs the Revenue method of Accrual based accounting, and the Cash-based expense method.
But when you hire PO Solutions to handle your Property Management and HOA Accounting, you never have to worry about the “how.” We’ve successfully managed over 5,000 units for over 15 years inside, around, and beyond the parameters of Metro Atlanta. See what PO Solutions can do for you! Call today!