Hiring someone to handle books

Thoughts from those who have hired management companies to strictly handle your financial affairs. What do you have them do and do you still have a volunteer board treasurer to oversee them? As we have grown the treasurer position has gotten more demanding and we are looking at some alternatives. I would be curious if anyone had some bid specs or a sample RFP that they have used as well, or any contracts that they have used.

Why don't you set up and auto-pay plan in which all recurring bills (electric, gas, cable, gardening, pool service, custodial, etc) are paid automatically from your operating account. Then the treasurer would only be faced with the out-of-the-ordenary bills.

Hi Brad:

Many management companies will do your financial-related affairs. Typically, those contracts include the following:
Bill or send out coupon books
Collect assessments
Pay bills authorized by the HOA Board
Send out delinquency notices to owners who don't pay
Generate monthly financial reports
Balance & reconcile the checkbook
Keep files on the Lot records of ownership
Fill out mortgage/title questionnaires
Send out "welcome" letters to new owners
Deposit assessments
Maintain separate accounts for operating and reserve funds.
Assist with investment of reserve funds (typically in money market accounts or CD's).

They may also include the following (per Board policy):
File liens when accounts become several months delinquent
Send owners to the collection process
Send out a copy of documents to new owners
Set up payment plans for owners who are past due

Some management companies send out a coupon book for payments, and some send out bills. The billing is more costly, but lets owners know promptly when their account is not up to date. I'm in favor of billing, as opposed to coupon books.
Depending on the size of your assessments, you may want to bill on a yearly, half-yearly, quarterly, or monthly basis. The more often you bill, the higher the costs for the HOA; however, you want to balance the costs to the HOA and the ability of the owners to come up with a chunk of money to pay the assessment if billed less than monthly. Past-due accounts would be billed monthly.

A good accounting firm should be able to do most of the above items. The important thing is to make sure that they understand HOA accounting.

J. Patrick Moore, CMCA