Condo board members in Illinois take on many responsibilities when they volunteer to serve on their board. Managing the financial health of the association is just one of them, and it can be a daunting undertaking. Whether you are new to serving on your association’s board of directors or are a seasoned member, here are some tips for successfully managing your association’s finances.
Tips for Managing Association Finances
Financial management is a crucial aspect of running a successful condo association in Chicago. Here are some ways to make it easier and more successful.
- Regularly review association financial statements – These documents, including the balance sheet and income statement, are key indicators of the association’s financial health and will inform decision-making, particularly when it comes to setting the annual budget. Learn how to read them and what to look for so you can make the best decisions for your HOA.
- Consider short- and long-term needs during annual budget planning – When preparing your HOA’s annual budget, the board must account for the day-to-day operational needs of the association as well as factor in future expected and unexpected costs. To ensure adequate funding when the time comes, you should allocate your budget into two accounts – an operating fund and a reserve fund. For more about planning for future expenses, read this post.
- Be transparent with homeowners – When condo owners feel left in the dark, tensions tend to escalate. The board should provide regular financial reports, budget updates and always clear explanations of assessments. Transparency fosters trust and ensures homeowners understand the financial health of the association.
- Partner with an association management company – Many condo boards find it helpful to hire a third-party professional association management company to help them keep up with the day-to-day management and financial responsibilities of the association. This can relieve much of the burden board members feel of this responsibility.
Our team at First Community Management helps condo boards by preparing for meetings, distributing notices, managing and maintaining the community property, and assisting with other financial aspects of managing the condo association. If your association could benefit from our professional services, get in touch with us today to learn more.