Greetings and thank you in advance for your assistance. I know there are some HOA Setup posts out there, and I've reviewed them, but I just want to ensure this unique situation is done correctly! So, apologies for any perceived redundancy, but i promise, it's unique! I'm setting up the books for a 96 unit HOA in QBO. Ultimately, I'm seeking advice on the best way to map this out, customize it, etc. to ensure this is done correctly. There's a current treasurer keeping the books by hand and I'm being brought in to wave the digital wand and convert the masses! Thus far, I've setup the following:Entered the Property Addresses as CustomersAdded the Resident Information as Sub-Customers to the associated property NOW...here's the business they will be conducting and how they're conducting it...They will collect monthly dues from each resident. The details are fuzzy here, but I believe that the residents can pay in the following ways:Send a Check which is then processed by the TreasurerSend a check/pay directly to the bank with a coupon. Theoretically, I will be able to connect to the bank to check the #'s and use it for QBs transactions.The amount owed each month is the same for each resident (i.e. $100 X 12)They don't have huge capital expenditures...they pay out to vendors for Lawn care, Cable, etc. usually on a monthly basis.They want to be able to track income from dues against expected payments resident by resident WHAT I WANT CLARITY ONGiven this relatively easy and simple flow of $$, what is the best way to set up COAs? Money comes in from Dues, over to savings, then out to vendors.Keep in mind, we want to show that $xx.xx came from Y resident and their balance is zero (?) or something like that. Initially, I think I set this up as a recurring PLEDGE?How then does the mula come in, get credited to the right resident and then into savings for spending on vendors after???Do I then set up recurring Pledges? Or, invoices?Can I link the bank to then complete the above referenced action of correctly mapping to a resident account, and then into the gen fund. THANK YOU ALL AGAIN for any assistance you can provide!

Question

HOA Setup

Forum|Forum|2 years ago
June 29, 2023
1 reply
13 views

Greetings and thank you in advance for your assistance. I know there are some HOA Setup posts out there, and I've reviewed them, but I just want to ensure this unique situation is done correctly! So, apologies for any perceived redundancy, but i promise, it's unique!

I'm setting up the books for a 96 unit HOA in QBO. Ultimately, I'm seeking advice on the best way to map this out, customize it, etc. to ensure this is done correctly. There's a current treasurer keeping the books by hand and I'm being brought in to wave the digital wand and convert the masses!

Thus far, I've setup the following:

Entered the Property Addresses as Customers
Added the Resident Information as Sub-Customers to the associated property

NOW...here's the business they will be conducting and how they're conducting it...

They will collect monthly dues from each resident. The details are fuzzy here, but I believe that the residents can pay in the following ways:
- Send a Check which is then processed by the Treasurer
- Send a check/pay directly to the bank with a coupon. Theoretically, I will be able to connect to the bank to check the #'s and use it for QBs transactions.
The amount owed each month is the same for each resident (i.e. $100 X 12)
They don't have huge capital expenditures...they pay out to vendors for Lawn care, Cable, etc. usually on a monthly basis.
They want to be able to track income from dues against expected payments resident by resident

WHAT I WANT CLARITY ON

Given this relatively easy and simple flow of $$, what is the best way to set up COAs? Money comes in from Dues, over to savings, then out to vendors.
- Keep in mind, we want to show that $xx.xx came from Y resident and their balance is zero (?) or something like that.
  - Initially, I think I set this up as a recurring PLEDGE?
  - How then does the mula come in, get credited to the right resident and then into savings for spending on vendors after???
Do I then set up recurring Pledges? Or, invoices?
Can I link the bank to then complete the above referenced action of correctly mapping to a resident account, and then into the gen fund.

THANK YOU ALL AGAIN for any assistance you can provide!

QuickBooks Online

A

Archie_B

Level 6

Hi there, bneater. I appreciate the effort in sharing those details. I'll explain how property management works in QuickBooks Online.

In QuickBooks Online, you have two options for recording income from residents or property owners. It depends on when you receive your payment. You can either record it as an Invoice if you expect to receive payments later or as a Sales receipt if you receive their payments right away.

In your case, what you initially set up as customers and sub-customers is correct. However, keeping track of transactions and using the correct account for property management can be tricky.

Thus, I recommend consulting an accountant for guidance if you're not sure what accounts to use, or how to track these types of transactions. If you don't have an accountant, we can help you find one in you: Find a ProAdvisor.

You can also use the information in this article as a reference:: Record transactions for a property management company. Although the steps in this article are specific to QuickBooks Desktop, you can use them to guide you in recording transactions for rental property and property management.

Let me know if you have any additional concerns or questions about customers or invoices. I'll be here to assist.

B

bneaterAuthor

Thanks Archie - It's good to know that I'll have support through the process. The only thing I'll add is that there is a treasurer - with what I have to believe is knowledge of accountancy given his prediliction for keeping the books by hand on a physical ledger. So, I anticipate there being an intentionality to the existent bookkeeping - I just want to think about what a typical setup would look llike in anticipation of what is either going to be shared or turned over to me.

Keep in mind that there is some resistance to this switch over, but the project is being mandated by the Association Board. So, putting the political discussion aside, I just seek information such that I can be ready to work with whatever exists and build confidence in this transition throughout the process - because ultimately, it is he that will inherit these books!

To piggy back off your reply - the Dues are received asynchronously. That is, residents are submitting their dues for 7/1 throughout the month of June - sending it to the bank, sending it to the treasurer, carrier pigeon - i don't know. But, suffice to say that throughout the month of June, money continually comes in for the July 1 due date. And then, when we get to 7/1, we Groundhog Day it and start doing the same for 8/1. Having said THAT, we all know that there will be residents who have paid 6 months in advance and some residents who will pay late. That's life.

So, is the set up as a PLEDGE correct? And then, when we process the payment - are we sending a receipt because we're processing it at that time, whatever that time is??? And, what is happening behind the scenese in the journal, re: money flowing to accounts.

Thanks again!

BN

B

bneaterAuthor

@bneater

"When you say, "Cash" ( Then, when you receive payment on the invoice, you are crediting (decreasing A/R) and debiting (increasing) cash. ), what account or category would that be? In my head the processing of the payment is what moves it into and out of A/R, and then I would want to move it to either a general 30000 level (equity) or 40000 (revenue) account, THEN, move it around based on the budget/bills."

"Cash" is the accountant's term for any bank account or undeposited funds (UF). It's easier than specifying checking or UF as each client does their books differently, and it's how we learned it in school. To be clear, you aren't moving payments around. You are making what's known as "adjusting journal entries" (AJEs) when you make an entry that books the reserve expense and the corresponding entry to equity for long-term replacement reserves. Otherwise, you are just entering bills for the weekly or monthly services and paying them when due.

"Is it wrong to think of the equity accounts as "holding accounts" during the month or for longer term expenses, say things that are only billed once a quarter, or less frequently, etc. AND THEN move the money to the 600 level Expen(se)diture account when the bill is to be paid?"

Equity accounts are holding accounts for long-term replacement reserves for the HOA but not for weekly, monthly, or quarterly recurring expenses. These equity accounts are for the common elements that the HOA is responsible to replace based on the HOAs governing documents - siding, roofs, driveways, roads, pool, etc. However, it is not for grass cutting, pest control, snow removal, etc. The state I live in requires adequate funding for replacement reserves so that future HOA residents don't get surprised by a massive assessment to cover roofs that should have started being funded from day one. Your state may be different. The funding of the equity accounts should be based on the HOA Board's budget.

Just so you know you're not listening to a complete rookie, I should mention that I was an HOA treasurer for a couple of different HOAs (both of which I transitioned to QB from pen-and-paper) and was a corporate controller for many years so I know just enough to be dangerous;-).

Perfect - thank you, again @Rainflurry I'm going to have to cut you in on the job at this point!

We're in Florida - so, let your mind run wild in re: regulations. As a implant to the state, it is the most hands-off, yet over-regulated, and over-bureaucratized state that claims to be anti-red-tape. At least in the Northeast, they didn't hide behind a facade of small-government - they are big, political, and costly - and they let ya know it. I admire that these days!

I get that when we talk about "moving money around" the AJE's really have the money just sitting in the same place....we're just moving it around digitally/mentally - like, bookkeeping Jedi. I've just been so programmed on the double-entry and the monthly cycle that I want to ensure we know what money is where at different times of the month. So, for example, since the dues can come in via Checking (directly) or U/F's (manually) to Checking I wanted to treat the Quickbooks Checking account as a clearing house, meant to properly credit the customer account, and then move into the General Fund to be apportioned to the Equity/Expense account as dictated by the budget.

This way, if there is money in the "checking" - they will know that it needs to be processed. I guess, that's where I'm going with this...is to ensure that when the setup is complete and they take the books into mostly their control, that there are clear processes set up for them to accomplish their tasks of ensuring member account fidelity, paying their bills, and keeping their books reconciled on the monthly basis.

I'm in agreement with your assessment of the Equity/Expense account structure - and I believe it jives with their bylaws. The Management company that was there previously wasn't as clear with defining their accounts in that manner, but this is our chance to fix that and ensure that the equity accounts represent long-term reserves, and the Expense accounts are gears for the monthly bills, etc. We have a meeting scheduled to review all of their vendors/expenses to properly categorize!

THANKS MUCH!

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded