ARTICLE CONTRIBUTED BY: TRISH BAKER, GENERAL MANAGER, AT KW PROPERTY MANAGEMENT & CONSULTING

The annual budget season can often be a complex and challenging process. With careful planning and collaboration, however, it can become a smoother and more effective endeavor.

Here are best practices from one of KWPMC’s lifestyle General Managers, to successfully navigate through your HOA budget:

Timeline:
It’s important to start your budget preparations early, while keeping in mind that budgeting shouldn’t be confined to a specific time of year. Instead, consider budgetary implications throughout the year to avoid any last-minute surprises. Involve the entire board in the budgeting process. This collective effort brings diverse perspectives, leads to more well-rounded decisions, and establishes a clear timeline. Clearly communicate the timeline for the budget process, including when budget workshops will take place and when approval meetings are scheduled. Record budget workshops, review sessions, and important announcements via video. Share these recordings on the community website and broadcast them on the community channel.

Review Contracts:
Comprise a detailed review of contracts and insurance increases, and ensure explanations are comprehensive and accurate. Evaluate ways to save costs, including reviewing utility usage, renegotiating contracts for savings, and optimizing contract services based on frequency of use. This groundwork will also give you a head start for the following year’s budget process. Carefully review each budget line item, to ensure that no detail is overlooked, and help identify areas where adjustments might be necessary. Accurate coding and accounting ensures that every item is coded correctly in the General Ledger to collaborate with accounting team and address any modifications.

Communication:
More than anything, increasing communication with committees and residents to understand their needs and gather insights for enhancements, is crucial to a successful budget. Look for initiatives that can elevate the property experience, whether through amenities, services, or community events. It is also important to maintain an “idea book” that tracks changes and improvements proposed by the board. This helps in recognizing evolving needs and facilitates informed budget decisions.

Takeaway:
Take your time—budgeting is a meticulous process. Review each section thoroughly, adhere to the established timeline, and triple-check your work. Consistency and attention to detail are key. Remember to communicate regularly with the board and other stakeholders for a collaborative approach. By following these strategies and maintaining an organized and thorough approach, property management professionals can streamline the budget season, make well-informed decisions, and ensure the financial stability and success of the community.