Willam Demers & Company has been supporting the financial needs of Florida community associations and property management companies for almost 25 years. Since our work includes bookkeeping, audits, reviews, and tax preparation, we have an inside look at what successful communities do, and our guidance introduces the routines and procedures that help improve financial health. This list is a quick overview that helps lay the groundwork for how to effectively plan, protect, spend, and save. For more details on any topic, please visit our website or contact us directly at 727-306-8811.
Our top five financial tips for Florida community associations:
Create a new budget every year. You can’t, and shouldn’t, assume that last year’s budget can be plugged in without any changes. Rather, reference it as a guide. This also helps you identify where past budgets fell short or where spending can be redirected. Since an annual community association budget is required by law in Florida, you should do your due diligence and start each budget from the beginning.
Stick to your budget. It’s imperative to maintain your spending limits. An unexpected surplus isn’t automatic grounds for more spending. Any new disbursement should be targeted toward high-priority projects and be fiscally sound.
Honor your reserve fund. One thing that successful community associations do is properly plan ahead. They budget for their future needs, so they’re prepared for property and amenity repairs. Think of the reserve as a savings account for major repairs that also receives regular deposits. For condo associations, Florida law governs the funding and use of reserve funds, so it’s worth taking seriously.
Maintain adequate operating cash. We advise that 10-20% of your total budget should be maintained as operating cash. That’s been difficult with the tumultuous past year. But there are ways to cut costs to help make up the difference, such as reviewing your insurance policies or rebidding your contracts. A CPA who is experienced with community associations can offer professional advice on how to improve efficiency while also cutting costs.
Review the financials each month. Ideally, your treasurer will review the financial statements and present a report at each board meeting to keep everyone informed. This ensures that any unusual activity or increase in spending is quickly identified.
When should you call a CPA?
Most operations can be handled independently by the board and property manager, but certain situations are better covered by professionals. And depending on your gross revenue, Florida statutes may require an audit or other annual financial review. When you need assistance with an audit, review, compilation, or tax preparation, be sure to contact a CPA who has experience with working with community associations.
If you have any questions about how Williams Demers & Company can help you, please reach out to us directly at 727-306-8811.