Accounting for Condominium

[VAngel]

I like to know more about good experience for the book keeping in Condominiums. How do you manage to run your reception, Do the manager pay bills by cash or banking? Do the reception do the book keeping them selv or do you outsource. We have a condominium of 80 condos.

[moonseeker]

Committee and JPM should establish procedures with 100% checks in place. Would opt for payment to bank account only and expenses by check, signed by 2. Petty cash and max. 5000 allowance for spending limit JPM. Above must be authorized. Not including regular payments like salaries, electricity etc. etc. Have designated FO in committee and monthly full accounts reviewed. Have yearly detailed budget and try to stay within. Put away enough for future big items. All depends if you can find willing  and capable committe. Not easy. Most of them are either power hungry and or not qualified. Dreaming to establish 1st.  world ways.  Best of luck. MS

 

[KittenKong]

80 units is not a very large number so I would have thought that all payments could be made directly to the bank, though you might need to consider billing items like water quarterly rather than monthly. Having no incoming cash in the office will dramatically reduce the opportunities for theft.

 

Having your accounts handled by an outside accountant will also reduce the risk of theft in your office, though whether the extra cost outweighs the risk rather depends on your building.

 

If you have a management company they would normally handle this, but presumably you dont have one.

 

The condo act requires that a monthly cash-flow report be posted for co-owners. It also requires that a yearly audit be made but you should be aware that these are a joke and basically only verify that the books balance, without any investigation as to whether they make sense or not.

 

As long as your expenses are fully justified I dont see that it makes much difference if they are paid in cash or not.

 

The most important thing is to check everything and ensure that all income is booked and all expenses justified. If you dont then someone, somewhere will steal from you.

[KittenKong]

8 hours ago, moonseeker said:

Put away enough for future big items.

 

That is known as the sinking fund and is accounted for separately from general operations.

[VAngel]

Thanks for useful information.

How many staff in office, do you think we need including the manager and what kind of qualification do they need? Do the manager have a special education?  

[VAngel]

How do you pay electricity for each condo. Now our manager pay 80 seperat bills pr month of 50 bath each covering electricity maintenance for each condo. 

Will it not be possibly for the manager to pay maybe every 3 month or 1 time a year ?

Besides of that she pays also the meter in seperat bills.

 

 

[smutcakes]

1 hour ago, VAngel said:

How do you pay electricity for each condo. Now our manager pay 80 seperat bills pr month of 50 bath each covering electricity maintenance for each condo. 

Will it not be possibly for the manager to pay maybe every 3 month or 1 time a year ?

Besides of that she pays also the meter in seperat bills.

 

 

You should make owners pay their own electricity bills, it is easier enough to do, even if they are not there in person. Have the management concentrate on managing the common areas of the property. Once they start doing things for Co-owners like paying electric, before you know it they will be paying water, paying this that and the other and handling large amounts of cash of the Co-owners not to mention taking their time away from their main function.

[moonseeker]

Even with just 80 units, absent or resident, this becomes quite a subject to be fully explained and discussed here. First of all study the Condo Act to understand the basics, then it is not more complicated than running and supervising a small business. Either find a JPM with some experience to set it all up or hire an outside company. No offense, but you seem to lack basic knowledge of how things work here and need someone to look at all facts and then guide you. Are you the only owner with questions? Is there an existing committee? Are basic procedures in place? Once you study the Condo Act you will start understanding the process and requirements. Good luck with your venture. I know of very few well managed and supervised condos in town. Most either have a mess or lots of infighting and wannabes in charge. Best of luck. MS>

[lkn]

11 hours ago, VAngel said:

Will it not be possibly for the manager to pay maybe every 3 month or 1 time a year ?

Besides of that she pays also the meter in seperat bills.

There are only two ways to do this: The individual monthly bills, or set up automatic debit.

 

I would strongly advice you do the latter, ideally each co-owner would set up their own automatic debit for their own bill.

 

And for the condominium, set up automatic debit for water, building’s electricity, internet, phone, and any other bill you may have, as that simplifies things.

 

There is another thread about software for building management, I have linked to it below, but a quick summary of how we do it in my building:

 

1. Building manager tracks things via Google spreadsheets (invoices, receipts, inventory counts).
2. Everything that can be automated is automated, like automatic debit, calculating common fees, etc.
3. Water and management fee prepaid for a full year (but co-owners can see their actual water usage online)
4. External accountant visits our building once a month to get all documents for the previous month, bank statement, and she keeps the real accounts (personal accounts for co-owners, accounts payable, etc.).
5. Accountant sends me trial balance / general ledger for approval and when I have approved it, sends the income and expenditure report to the building manager who then prints it out and puts it on our bulletin board for co-owners to see.
6. The building manager can get a cheque from the JPM that must be co-signed by a committee member, this system I am not really happy with, because no-one on the committee have a clue about what they are actually signing, though our building manager is very ethical and I check finances monthly, so it’s not really that I worry about abuse, it’s more that I find it cumbersome, I would rather just give our building manager an expense account.
7. I try to make co-owners settle accounts via bank transfers, but some prefer cash, in that case, building manager makes a deposit when petty cash reach a certain threshold. Again, this is not that I don’t trust our building manager with cash, but bank transfers leave a paper trail and human errors are much less likely to happen, like writing the wrong amount, room number, or similar on the receipt, co-owner thinking they paid but can’t find the receipt, etc.