In a homeowner association (HOA), the board of directors has a long list of responsibilities, not least of which is ensuring that the organization’s finances stay on track. A financially healthy HOA means smoothly completed projects, well maintained facilities, and ultimately, ensures the well-being of the community.
Behind the scenes of every successful HOA lies a team of dedicated experts. At 1st American management Co., Inc. this expertise is epitomized by their seasoned accounting team, led by Accounting Managers Teresea Beach and Tammy Bridegroom. With over 30 years of experience managing properties and a portfolio encompassing 170 plus associations representing over 15,000 homes, their team stands as a beacon of reliability and proficiency in HOA management led by 1st American Management Company’s co-owner and Certified Public Accountant, Gina Manns.
“We have two Accounting Managers, Teresea Beach and Tammy Bridegroom, who each bring their own set of skills to the company,” Manns said. “Teresea has grown with the company over several years, moving through different advancements and training to obtain the skills needed to prepare the financial statements and help oversee the accounting staff. Tammy brings leadership skills and accounting knowledge from experience with previous organizations, which gives her the ability to onboard new properties and prepare financial reporting required on a monthly basis.”
One of Beach and Bridegroom’s primary responsibilities is preparing financial statement packets. This set of documents includes items such as a balance sheet, income statement, aged payables reports, and more. Together, these documents paint a picture of an HOA’s health, what areas are doing well, and what items might need some attention.
The income statement, often referred to as a profit and loss statement, serves as a compass guiding HOA boards through the financial landscape. It offers a comprehensive view of the association’s revenues, expenses, and net income or loss over a specific period. “The first place one would want to look would be the income statement,” Bridegroom said. “This report clearly shows the income and expenses for a particular month and year to date and has a comparison to the HOA’s budget. This report will help determine if the association is on track, if assessments are being paid, and if anything out of the ordinary occurred that month.”
The pair highlighted the balance sheet as a particularly in-demand document among HOA boards, as the numbers it includes offer an at-a-glance assessment of the HOA’s available cash. “The balance sheet allows the HOA board to assess the association’s overall financial strength and stability,” notes Bridegroom. “By monitoring changes in assets and liabilities over time, the board can identify areas of concern, such as increasing debt levels or declining reserves.” Bridegroom also stated that “Everyone wants to know that there are funds in the operating account, and they like to see the capital reserve accounts grow as they are funded throughout the year.”
Another strong litmus test for an HOA’s health is the aged payables report. It shows the organization's bills and when or if they have been paid. A healthy association, Bridegroom said, will be up-to-date on all of its payments. Associations that work with 1st American Management Company enjoy the benefit of the company’s strong team of accounts payable/accounts receivable specialists who, along with the rest of the accounting team, help ensure the organization stays on track financially.
“Our specialists handle the detailed day-to-day financial functions of entering invoices, paying vendors, and recording and depositing payments from homeowners and tenants,” Manns said. “The attention to detail the accounting staff provides assists the property managers in providing the financial information to the boards of directors so they can understand and analyze the health of the associations and track the income, expenses and cash balances.”
“Monthly detailed reporting provides the opportunity for a board to make educated decisions year-round,” Bridegroom said. “Sometimes unforeseen expenses come up, and it is important to know immediately how to respond. These situations may require cutting the budget in one area, using reserve funds for a project, or even needing a special assessment to cover a large expense.”
In the dynamic landscape of HOA management, sound financial oversight is paramount to fostering a thriving and resilient community. 1st American Management Co., Inc. empowers HOA boards to make informed decisions that uphold the financial well-being of the association and enhance the quality of life for homeowners. With a commitment to excellence and a dedication to transparency, 1st American remains at the forefront of HOA management, providing expertise and unwavering support to communities across Northwest Indiana. To learn more about 1st American Management and how they can help your HOA, visit 1stpropertymanagers.com
