End of the Year Budgeting Tips
With the end of the year quickly approaching, it is time to put the finishing touches to the year’s budget and start preparing for the new budget. Your yearly budget is one of the most important considerations of the year. As such, to help your HOA succeed as you enter 2018, we have put together a list of budgeting tips that will propel you into the new year.
Review the Past Three or Four Years
When creating the budget for the new year, it is generally recommended that you look at the past three or four years of budgets. This is a valuable tool that helps you to glean information about where money has typically been spent in your association. This serves the purpose of showing you what items you should be putting in the new budget as well as giving you perspective on which areas deserve a little less funding and a little more caution.
Rethink Your Vendors
Although there is much to be said for customer loyalty and building relationships with your vendors, the end of the year is a good time to review all of your vendors to be sure that you are getting the best services for the lowest price. A little shopping around, even if it is just window shopping, can ensure that your association is getting the quality of service that it deserves without overstretching the budget.
Calculate The New Year’s Homeowner’s Fees
As you prepare to proceed with the new year’s budget, you will need to calculate the new homeowner’s fee. In most cases, the fee should rise each year, but not so much that homeowners balk at the high number. The goal is to keep abreast of all of your expenses so as to keep the HOA healthy, but without alarming or angering residents.
Communicate With Current Vendors and Insurance
Communication with your vendors is a valuable end-of-year tool that should never be ignored. It is important to contact each company that you routinely do business with to make sure the numbers that you have estimated for each category are accurate. In so doing you can avoid being unpleasantly surprised when a price changes in the new year. Instead of waiting for your insurance company or vendors to reach out to you, be proactive and call them.
Review the Reserve Fund
Now is a good time to review the reserve fund in order to check that it is being property maintained, and to ensure that incoming funds match outgoing expenses for each year. Doing so will help you to avoid special assessments, and will help you as you decide which projects to pursue for the next year.
December is an important time to review your finances and prepare for the upcoming year. Do not let the month pass you by without working hard to ensure a healthy budget for 2018.