Published by the Clearcrest Team
Imagine your 10-home HOA has $8,400 in operating cash at month-end. An approved $1,200 plumbing invoice is still unpaid, a $500 reserve transfer is pending, and $900 in dues is overdue. Before approving the next repair, the board needs to see how those numbers fit together.
A good HOA monthly financial report lets a volunteer board answer three questions in about 15 minutes. How much cash do we have? What still needs to be paid or collected? What needs someone’s attention before the next meeting? Run these five checks on the same fictional month-end packet.
1. Review operating and reserve bank reconciliations
Ask for a reconciliation for each account and its matching statement. In this example, the operating statement ends at $8,750. A $350 check was already recorded in the books and hasn’t cleared. Subtract it from the statement balance and the adjusted balance matches the $8,400 in the books. Flag old outstanding checks and unexplained differences for follow-up.
2. Compare actual spending with the budget
Scan the income and expense report for the month and year to date. Ask whether a difference comes from timing or a lasting change. If monthly landscaping rises from a budgeted $450 to $525 because of a contract increase, reflect the extra $75 each month in the cash forecast.
3. Review the owner balance aging
The aging report should show what’s overdue and how long it’s been outstanding. Here, $900 is overdue across two accounts. Keep it out of the cash you’re counting on for near-term bills until it’s received. Assign the next follow-up under the association’s collection policy and keep owner-specific balances in secure records.
4. Confirm reserve transfers happened
Compare planned reserve funding with transfers that actually cleared. The packet shows $21,000 in reserve cash and a $500 planned transfer still pending. Confirm who will make the transfer and when. Keep reserve cash separate when deciding which operating bills the HOA can cover.
5. Track approved invoices until payment clears
Review open bills alongside the payment register. The $1,200 plumbing invoice was approved, but the register shows no payment. Give someone a due date to confirm it was issued. Setting aside that invoice and the $500 reserve transfer leaves $6,700 of the $8,400 operating balance before other bills or incoming dues. The $350 outstanding check was already included in the reconciliation, so it doesn’t come out a second time.
Close the review with an action list
Write down each open issue, who owns it, and when they’ll report back. Here, assign the plumbing payment, set a date for the reserve transfer, and follow up on overdue balances. At the next meeting, check those items before opening the new packet.
If your board wants to stay hands-on while getting help with reporting, reconciliations, and vendor payments, see Clearcrest’s HOA financial management services.