An annual HOA budget helps an association determine how much to charge owners for their annual dues and how much money is available to complete projects and cover emergency situations throughout the year.
Your association’s annual budget is likely something that adjusts from year to year. So, taking some time to plan out your community’s finances is essential.
While this task may seem daunting to the average board member; the help of your association management team and their financial connections can quickly bring together a workable budget.
Here are a few of our top tips for approaching annual budgets and ensuring that your association is in a position to succeed in its coming year.
Have the Right Team on the Job
When planning a budget, there has to be a specific group of people on the project. This task force will be solely dedicated to planning the community’s budget. This budgeting team that will lead your association to success should include:
- Board members
- The Board President
- The Board Treasurer
- Finance and budget committee leads
Reserve Time for a Budget Session
Planning out your association’s budget isn’t something that your board can add to its next scheduled board meeting. This process is going to take time and should have 100 percent attention devoted to its completion.
Make sure that the task force in charge of organizing the budget reserves a specific time to discuss the budget and build it out for the good of the community.
Examine the Actual Expenses From the Last Year
It’s always important to look back on the previous year when looking ahead at the next. The actual expenses that your association accumulated paint an accurate picture of what you can expect for your next budget.
From vendor charges to insurance premiums, the receipts your board has saved over the last year can help you start to determine what it’s going to cost to keep your association fruitful.
Looking back on the last year and prior year’s dues delinquency trends can also help your team predict how much money needs to be set aside to ensure that the community’s needs are met while your management team actively pursues cash owed to the association.
Line Up the Next Year’s Major Projects
Every association has a lineup of projects and maintenance needs to complete throughout the year. Take a moment to prioritize the projects that must be finished by year’s end and plan out the estimated costs of each.
If a project requires the use of a vendor, reach out to them and send requests for proposals. You want to make sure that this aspect of your budget is precisely planned out so that your community can afford to keep up its property value with annual improvements and repairs.
Make Sure Your Budget Has Planned for the Unexpected
Whether this year brings in an influx of unexpected dues delinquencies or your community faces extensive repairs after a natural disaster, your budget must always have a cushion to protect your community from the unexpected.
Your HOA management’s financial team can help you review your past year’s spending and determine how much money your association can set aside for emergencies. In most cases, if your association has been managed wisely, the funds are there, the trick is merely knowing where to allocate them.
Budget Your Association for Success With Goodwin & Company
If you are an association board member that knows your community needs help building a budget, let the experts of Goodwin & Company show your community ways to save money.
We are one of Dallas’ leading HOA management companies and have provided the highest quality of service to our clients since 1991. From budgeting to community outreach, we are ready to help you excel.
Contact us today to learn more about becoming a member of the Goodwin Association Family.