What is a Chart of Accounts? 🗂
Accounts are made up of a list of numbers and names you use to categorize your HOA’s Assets, Liabilities, Income, Expenses, and Equity.
Asset Accounts 🏦
Asset Accounts are used to categorize the things that you own and can include items like the cash in your bank accounts, accounts receivable or money owed to you. There are many other types of assets but money in the bank and money owed are typically the most important types of assets that HOA’s are concerned with. By default, HOA Messenger includes your bank accounts and an accounts receivable line item in your chart, but you can modify your asset accounts to accommodate the unique needs of your HOA. These accounts are shown on your Balance Sheet.
Liabilities & Equity Accounts ☔️
Liability and Equity Accounts are used to categorize the money that you owe, such as prepaid assessments (Liability), and money that is set aside to pay for future projects (Reserve Equity), such as re-paving your HOA’s streets, or your Retained Earnings, which is the total of all your assets minus your total liabilities. These accounts are shown on your Balance Sheet.
Income Accounts 💁
Income Accounts are used to categorize money that is owed to you, which for HOAs mainly consists of owner assessments, but can include other types of income such as pool key income or bank interest. By default, HOA Messenger starts you off with three default Income Accounts; Assessments, Miscellaneous Income, and Interest Income. However, you can of course modify your chart of accounts to accommodate the unique needs of your HOA. These accounts are shown on your Income Statement.
Expense Accounts 🧾
Expenses Accounts are used to categorize the money that you spend, such as paying for the landscape maintenance or the water bill. When you first start using the HOA Messenger Accounting feature, you are provided with four default Expense Accounts which include, Common Area Expenses, utilities, Administrative Expenses, and Reserve Contingency. However, you can of course modify your chart of accounts to accommodate the unique needs of your HOA. These Accounts are shown on your Income Statement.
For an overview of how to get your HOA’s Chart of Accounts set up, click HERE.