It’s hard to believe but budget season for the 2021 fiscal year is already here! 2020 has skyrocketed by for reasons beyond our control, but it’s time to get ahead and start preparing our communities for the future. Thinking about your associations budget might cause stress, but we must remember it essentially holds the success of your community for years to come. It’s more pressure than we’d like to admit, but today is the perfect time to get your team focused for an in-depth review.
Most types of expenses that play into an association's budget are items such as landscaping, administrative costs, utilities, maintenance costs, and tax fees. Normally, what is and isn’t included within the budget is driven by that association's governing documents, as well as common areas that the association is to maintain.
COVID-19 may have introduced new areas that should be included within your budget. It’s imperative to review these topics with the board of directors and include them in new years statements.
Review Budget & Financial History:
COVID-19 created financial barriers that most weren’t expecting.Today, your community might be spending extra on the sanitation of your shared spaces. Because these expenses are new, remember to add these into the budget for 2021.
When creating your new budget, look for ways to save your association money. That might sound silly, but often we forget overarching purposes! Homeowners want to spend less and see strides from management to increase home values. Remember to always review the previous two years! This will help your numbers, and alignment with goals!
Prioritize Community Projects:
Thinking about community repairs can be overwhelming. One good practice is to separate the “Needs” vs. “Wants”. This practice should help your association prioritize. You'll see those safety concerns move to the top of the list, and other topics of less importance scattered later on the list.
Other budget sensitive items you’ll want to review include;
- Utility Increases
- Vendor Contracts:
- Budget Reserves
- Special Assessments
- Legal & Collection Costs
Budgets are complicated and they take time, but staying in top on your budget is a huge part in remaining fiscally responsible as an association. Refocus your teams’ efforts, start today, and get ahead of the game.
Thinking about enhancing your communities accounting software? Connect with a Caliber specialist today.