Bookkeeping for Small HOA

Whether you’ve just volunteered for your community’s Finance Committee or you’re actively involved in helping select a bookkeeper for your HOA, you want to understand some of the ins and outs of association finances. After all, that will help you do a better job of evaluating providers and results.

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Some aspects of HOA finances involve elements of community management that go much deeper than the selection of a bookkeeper. To understand the big picture of community bookkeeping, you’ll also want to learn more about HOA management software itself.

What's the best free HOA management software?

What's the best free HOA management software?

To answer that question, let’s separate it into its essential parts. First, there’s HOA management software. These are software products that typically operate within a web browser, and that enable communities to manage all aspects of their affairs, from invoicing their dues to accepting reservations for use of their amenities and registrations for their events. The best of these products also handle member management and neighborhood communications, and provide a secure online document repository for Covenants, Conditions, and Restrictions (CCRs)—community rules and regulations—and other essential files.

Some HOA management software providers offer free customer plans, but these tend to contain extremely limited feature sets. The essential purpose of these free HOA software plans is to attract customers’ attention so providers can sell a full-featured alternative. Better yet, look for other providers that create free trials so communities can evaluate their software. Typically, these trials include access to the provider’s full feature set for a limited time. In the long run, you’ll probably pay more to add features to a stripped-down software package than to opt for one that doesn’t rely on à la carte pricing.

Your view of the best free HOA software will depend on what you expect from it and what you need it to offer. For a community that’s searching for the best HOA management software, a free trial is a great place to start.

What makes a good HOA management website?

If your homeowners don’t visit and use your community website, it can’t do you much good as an administrative tool or a neighborhood asset. That’s why you want your site to embody some specific traits and cover some equally specific aspects of HOA life.

A user-friendly site engages members—and prospective residents—with easy-to-use navigation and quick access to essential information. Before you choose a provider and build your site, verify whether they offer free HOA website templates and site themes that make it easy to create and showcase your content.

You’ll need your website to present an attractively responsive design that accommodates all types of devices, from desktop and laptop computers to tablets and phones.

Your site also needs to provide downloadable access to important HOA documentation, including governing documents such as bylaws and CCRs, minutes of board and committee meetings, community newsletters, and clearly specified rules and procedures for everything from amenity use to common area policies.

Plan to build in the ability to share news and announce upcoming meetings, votes, and community events.


Best self-managed HOA software


Provide contact information for administrative officers, including your board of directors, as well as for your property management firm—if you’re not self governed—and the individuals responsible for various aspects of day-to-day community affairs.

Give residents the ability to pay their dues, amenity reservation fees, and event registration costs online, with secure payments built directly into your site. Additionally, provide a way for residents to take care of occasional expenditures for required household components such as pool keys and approved mailboxes.

Create a FAQ document to answer basic inquiries, and build link pages that show how to reach local government, emergency services, and utility companies. List answers to common questions about trash and recycling pickup schedules, local historic sites, and favorite service providers.

Incorporate an interactive ARC ticketing system that enables residents and administrators to trade notes about remodeling requests, and guide residents to choices that uphold neighborhood standards.

Promote neighborhood communication with a newsfeed that brings the community bulletin board into the 21st century.

Incorporate integrated systems to send e-mail blasts and text messages to individual members or to the community as a whole, as an ideal way to provide updates, distribute alerts, and keep everyone informed.

How do you evaluate HOA software from a financial perspective?

The best self-managed HOA software makes several essential contributions to the financial health of communities. First, it handles all the invoicing for community dues and fees, including recurring as well as one-time charges. Second, it provides access to secure online payments, which vastly simplify the process of receiving timely payments from residents. Third, it interfaces with leading accounting software, including Intuit QuickBooks.

The combination of HOA software and QuickBooks ramps up your capabilities—and if you set up QuickBooks correctly, you’ll make your accountant very happy. That’s because with the right setup, you’ll be able to send your accountant all the data they need for tax purposes and other financial reporting, and you’ll be able to do that without any extra work.

You don’t need a special version of QuickBooks for a self-managed HOA. Just choose the edition your accountant recommends—or your bookkeeper already uses. If you’re worried about how to use QuickBooks for an HOA, ask your accountant or bookkeeper to give you a tour or recommend some tutorials.

If you don’t already know what to look for in HOA financials, that’s another reason to sit down with your accountant or bookkeeper. The time you spend making sure you understand what to do and why to do it will pay off when you put together your data. You’ll also have a better understanding of the impact and implications of financial matters.

What is HOA accounting software?

What is HOA accounting software?

Your community needs HOA accounting software to track and manage its income, expenses, and financial reserves. That doesn’t mean you have to invest in a specialized financial package. Your organization and its website are better off with specialized self-managed HOA software, but you can conduct your financial affairs in a general-purpose business accounting software package. The best HOA accounting software package for your community is the one that provides the features you need and interfaces easily with your accountant or bookkeeper. One of those options is the popular QuickBooks Online package, especially if your HOA software interfaces directly with it.

What's the best HOA accounting software?

When it comes to HOA accounting software, your best bet is to look for a strong combination of financial features in your HOA management software. That includes the ability to assign and record invoices and payments from your HOA software directly to QuickBooks without manual retyping or intervention.

Of course, the best accounting software for a small HOA may or may not be the same as the package you’d choose for a larger community. Some of these considerations relate to the number of features you need to accommodate the needs of a smaller versus a larger community. But some large HOAs have fewer features than some really advanced smaller communities do. When it comes to HOA accounting software, make your product selection based on the capabilities you actually need, plus the ability to upgrade to a higher-level package as and if your needs change. There’s really no such thing as “small HOA accounting software,” however, because all HOAs face some of the same fiscal reporting requirements.

Is HOA bookkeeping software different from HOA accounting software?

Is HOA bookkeeping software different from HOA accounting software?

Bookkeepers and accountants both work with the same categories of information: Financial data. The biggest difference isn’t the software they use. It’s what they do in that software. In fact, the best bookkeeping software for a small HOA—or a large one, for that matter—can be the best accounting software for those associations as well.

Bookkeepers manage the data so accountants can analyze it. That’s not to say that bookkeeping for a small HOA is an easy job that anyone can do with no training or experience. But with the right HOA management software that ties in to the right HOA bookkeeping software, the entire process becomes much simpler and more streamlined.

So is QuickBooks a Quicken HOA software package? And what is Quicken called now?

The product is called QuickBooks, but Intuit’s Quicken software includes a number of versions of the QuickBooks product. The main application is the Quicken online edition of QuickBooks. Quicken apps provide easy-to-use companions to the full version of QuickBooks.


Should I look for my community association management software at the same time as my HOA bookkeeping software? And do I need different options for a condo association than for a traditional HOA?

Well-designed community association management software can accommodate any type of self-governed community—or, for that matter, a management company that handles multiple communities. At the same time, association accounting software works for any type of community as well. QuickBooks for a condo association is the same program that regular HOAs and co-ops can use.



Virtually any business—for-profit or non-profit—can use regular accounting software like QuickBooks. The best version of QuickBooks for an HOA is the version that includes the features you need. Like virtually all software companies, Intuit makes various versions of its product, each tailored to users who need more or fewer features. Just as you select your HOA management software so it provides the right feature set, you’ll need to make the same type of selection with your financial-management software.

So can you use QuickBooks for an HOA? Absolutely! Many communities happily do exactly that. If you’re asking, “Can I use QuickBooks for HOA management?”, remember that financial software enhances and accompanies your HOA administrative functions, taking care of the fiscal aspects of your tasks, while your HOA management software handles the rest of the details—including invoice generation and online payments.

In conjunction with my HOA management software, how is QuickBooks good for HOA management?

One of the reasons to build your HOA website with a website software provider who specializes in HOAs is the simple fact that these specialized providers really understand what's involved in running a community organization. They build their software so it anticipates your needs—including some you might not have known you had.

For the same reason, you want QuickBooks to take care of the bookkeeping and accounting aspects of your community's affairs because this software specializes in that aspect of the business of your HOA. Is QuickBooks good for an HOA? Yes, because it provides you with a standardized framework in which to process your financials, one that you can set up in keeping with your accountant's recommendation.

What accounting methods do HOAs use? How do I choose which one to apply?

Absolutely consult with your accountant or bookkeeper about which accounting method they expect you to use, and follow their recommendations to the letter.

The three methods most common among HOAs include cash basis, accrual, and modified accrual accounting.

In cash-basis accounting, you record income when you receive it and expenses when you pay for them. This method is easy to understand, simple to administer, but can’t always do the best job of depicting your community’s financial affairs over time.

Accrual accounting records income when you earn it and expenses when you incur them. For example, it acknowledges dues revenue when you send out invoices, not when residents actually pay, and expenses when you incur them, not when you pay for them. This method can give you a more accurate long view of your HOA’s financial health and performance.

Modified accrual accounting is half cash basis and half accrual method. It uses accrual accounting’s revenue tracking and cash basis accounting’s expense methods.

How do I handle HOA fees—and how do I set up a homeowners association in QuickBooks?

Again, that’s a question you’ll need to ask your accountant and bookkeeper. They’ll tell you how to categorize HOA fees so they’re properly recorded. If you try to do it yourself, you may not get things just the way they should be. So sit down with your financial professionals and ask them, “How do I record HOA fees in QuickBooks?” Get the right information, and you’ll be on your way to success.



Overall, however, here’s the generally expected practice for setting up and tracking HOA fees in QuickBooks.

  1. Set up a chart of accounts, a complete list of every account in your general ledger. This is how you organize and categorize your fees.
  2. Create invoices for each homeowner’s HOA dues and fees. Include the amount they owe, when payment is due, and any other relevant information. You could handle this process directly in QuickBooks, but instead of that manual undertaking, you can transfer this information directly from the online invoicing and payment system of your HOA software.
  3. Record payments in QuickBooks. Again, you can bring in this information directly from your HOA management software to save time and eliminate data-entry errors.
  4. Generate reports from QuickBooks. You can track various categories to check your HOA’s financial well being, including profits and losses, your balance sheet (more on that later), and your cash flow

What goes into a property management chart of accounts? Does our HOA really need one?

Ask your accountant or bookkeeper to provide you with a chart of accounts and review your QuickBooks setup. In QuickBooks, an HOA chart of accounts provides the categories into which you sort and enter information about income and expenses. To track fees, a QuickBooks HOA chart of accounts will include categories specifically for your HOAs dues and fees, one-time charges, amenity reservation fees, and event registration payments. Overall, you’ll want categories for assets, liabilities, equity, revenue, expenses, costs of services provided for residents, other income (such as bank account interest), and other expenses, including legal fees, advertising costs, and taxes.

What makes a good HOA income and expense statement template?

What makes a good HOA income and expense statement template?

Check with your financial professionals, but in general terms, these are the elements that make up a good template for HOA income and expense statements.

  • Clearly categorized income and expenses, with all items allocated to the proper categories. That includes dues, maintenance costs, and more.
  • Comparisons with previous months, quarters, and years of data to make trends easy to spot.
  • Clear instructions for use, especially if the template is meant for people without accounting and bookkeeping training to complete.
  • Compliance with accounting standards and financial regulations, as well as your accountant’s expectations.

Your accountant may ask you to complete an HOA financial statement based on the financial data you accrue during a year. This simply may be a report you generate from financial software such as QuickBooks. You also may be able to request more in-depth statements from your accountant based on the data you supply, but with additional analysis and insights added in.

Remember that even if you use QuickBooks, you’ll still want to work with an accountant to prepare tax documents and other financial instruments.

What do HOA financial statements require?

An HOA financial statement needs to identify and itemize income, expenses, and financial reserves throughout a specific period of time. The categories of financial information on an HOA statement include the following for a specific period at a specific time (for example, for a calendar year at the end of it).

  • A balance sheet that itemizes assets, liabilities, and equity.
  • An income statement or profit and loss (P&L) statement that shows revenues and expenses.
  • A cash flow statement that tracks cash into and out of bank accounts.
  • A reserve fund statement that identifies money set aside for major repairs, common-area maintenance, and unexpected expenses.
  • A budget that shows financial plans and expectations for the next time period.
  • Notes about estimates, assumptions, and policies that underlie the financial data.


How do I make an HOA balance sheet? Can you make your own?

Not to sound like a broken record, but all of these financial matters require that you consult with your accountant or bookkeeper. You won’t want to pay someone else to correct your balance sheet when you can consult your financial professionals to find out exactly how to construct it.

In general terms, here’s what goes into an HOA balance sheet and how to prepare to fill one out. Your balance sheet should detail three categories of information.

  • Assets: What does your HOA own? This includes property, cash on hand, equipment, and any investments.
  • Liabilities: What does your HOA owe? This category lists debts and obligations, including loans, unpaid invoices, and other expenses.
  • Equity: Subtract your liabilities from your assets to represent the overall value of your HOA’s assets.

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You’ll need to prepare some information before you can create your HOA balance sheet. Note that if you use QuickBooks or another financial management software package, you should be ready for this task—if your QuickBooks data are up to date.

Here’s what you’ll need to gather and do for HOA balance sheet preparation.

  • Pull together all your financial records for the period of time you’re documenting. This includes bank statements, invoices, receipts, and records of transactions.
  • List all your assets, including property, equipment, cash on hand, and investments.
  • List everything you owe, including any loans or outstanding bills.
  • Subtract your liabilities from your assets to determine your net worth.
  • Create three sections in your balance sheet to cover assets first, then liabilities, followed by equity.
  • Verify your calculations and make sure that they are correct.
  • Double check your overall balance sheet, and make any necessary changes or corrections.

As with all financial documentation, rely on input from your accountant and bookkeeper to help you structure your balance sheet correctly. In fact, either your accountant or your bookkeeper may be the one responsible for constructing this document based on data you supply.

Now that you see how HOA management software and HOA financial software interact, and how to select the best of each for the betterment of your community, you can make the right choices to uphold your community standards, maintain and extend your neighborhood brand, communicate with your residents, and provide them with a valuable online tool for your and their convenience. You also can simplify the tasks of tracking and reporting community finances.

Regardless of which online HOA software tools you choose, make sure that you fulfill your full wish list of capabilities, both in terms of administrative functions and for your residents’ benefit. When you tie financial software like QuickBooks in with your HOA management software, you create an ideal combination for all aspects of the health of your community.

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