Numerus HOA Services

  What is a balance sheet and why is important for my HOA to provide one? A balance sheet is a financial statement that provides a snapshot of what an organization owns, and also what it owes to other entities. Where an income statement shows a summary of financial activity over time, a balance sheet is a snapshot at a particular point in time. It is one of the most important documents for managers and board members of a Homeowners Association (HOA) to understand because it provides a snapshot of the association’s financial health. What is a Balance Sheet? A balance sheet is divided into two parts that, based on the following equation, must equal each other or balance each other out: Assets = Liabilities + Equity Assets : These are what the HOA owns—such as bank accounts, investments, buildings, and equipment. Liabilities : These are what the HOA owes to others—like loans, unpaid bills, etc. Equity : Also known as net assets, equity represents the owne...

Homeowner Associations (HOAs) are tasked with managing the finances of their communities effectively. As a nonprofit corporation, most states require laws that require the corporation, in this case, the HOA, is required to keep financial records that are subject to the inspection of the members. Unfortunately, many board members that volunteer for the position do not have experience reading financial statements. Because one of the essential aspects of the board’s responsibility is maintaining accurate financial records and producing comprehensible financial statements, it’s important to understand these concepts. Understanding HOA financial statements is crucial for board members, residents, and anyone involved in the management of the community. Luckily, the basics aren’t as difficult as one might think. In this guide, we'll delve into the key components of HOA financial statements and shed light on some essential concepts that will help your board.   Balance Sheet: The ...