Community management companies work with boards and committees to keep the community running smoothly and efficiently. They offer comprehensive services, from bookkeeping and covenant enforcement to maintenance and financial management. Community managers are experts in money management, making them uniquely positioned to help with financial planning and decision-making. Here are eight ways community management can help with finances:
1.) Reviewing Community Financials Regularly
Community managers go through the community’s financial statements every month. This helps them identify areas of concern such as overspending, irregularities, or fraud to keep the community’s finances on track. If there are any financial red flags, community managers work with the board or community developers to create a plan of action to find a solution. The community managers provide valuable insights and recommendations to help the community save money and grow its financial reserves.
2.) Creating and Managing Budgets
Working with community managers helps communities to keep their spending in check and have a financial cushion in case of unforeseen circumstances. They create budgets based on past community spending patterns, income, expected future community needs, and community goals.
Managers also review the budget periodically to make sure it is still relevant and accurate. If any changes in the community could impact the budget, such as an increase in amenities or a change in the number of residents, they make the necessary adjustments.
Community managers have extensive experience developing budgets that meet the community’s needs while staying within the community’s means. They have a keen understanding of what the community can afford and where costs can be cut without compromising the quality of community services.
3.) Negotiating Contracts
Community managers are skilled negotiators who save the community money by getting the best possible terms on contracts for services. These include contracts for landscaping, snow removal, pool maintenance, and other community services.
Community managers know how to compare vendors and services to get the community the best value for its money. They negotiate to get discounts and favorable terms on behalf of the community.
4.) Developing and Implementing Procedures
The community’s board of directors and developers work with community managers to develop sound financial policies and procedures. These policies and procedures include establishing controls to safeguard community funds, setting spending limits, and establishing procedures for reviewing and approving contracts.
The policies and practices are used to manage the community’s finances in a transparent and accountable manner. They also help to prevent and detect financial irregularities such as fraud.
5.) Providing Training and Education
Community managers can help train and educate community members, board members, volunteers, and committees on financial matters. This allows members to understand the community’s finances and how their decisions impact its bottom line. It also fosters confidence and trust in the community’s financial management. Managers offer guidance on the best practices for effective financial management to help community leaders make sound financial decisions.
6.) Collecting Community Assessments
Every community has an assessment fee that community managers use to cover the costs of community amenities and services. They work with homeowners to verify that assessments are paid on time and in full. This helps the community have the resources it needs to maintain its amenities and services.
Managers also work with those behind their assessments to make payment arrangements. They understand homeowners’ financial challenges and work with them to find a mutually beneficial solution.
7.) Providing Financial Reports
Community managers create financial reports to help the board understand the community’s financial situation and make informed decisions. The reports show income, expenses, cash flow, and community reserve balances. They also include information on community assessment collections and outstanding assessments. This allows community leaders to identify potential financial problems and take corrective action as needed.
8.) Implementing Cost-Saving Measures
Managers recommend and implement cost-saving measures to reduce community expenses. These measures could include:
- Energy-Efficiency Initiatives: These initiatives include upgrading community lighting to LED bulbs, installing solar panels, and improving community insulation.
- Water Conservation Measures: Measures such as installing low-flow plumbing fixtures and drought-tolerant landscaping saves the community money on water bills.
- Waste Reduction: Programs such as recycling and composting can reduce the community’s trash disposal costs by diverting waste from landfills.
- Reducing or Eliminating Community Programs and Services: Community managers work with the community board to identify community programs and services such as events, shuttle buses, and community-wide Wi-Fi that the community no longer needs or uses. They then recommend eliminating or reducing these programs and services to save the community money.
Working With a Community Management Company
A community management company provides your community with financial expertise to stay on sound financial footing. They develop and implement policies and procedures to prevent and detect financial irregularities. Managers also create systems and processes that make it easy for community members to understand and comply with financial policies. All these efforts help improve your community’s overall financial health.