Your HOA's financial reports can look intimidating at first: columns of numbers, account names and accounting terms. But a few minutes with the right pages tells you a lot about how your community is doing. Here is a plain-English guide to what Colorado owners and board members usually see, and what to look for.
What is in a typical financial report?
Many associations prepare a financial package each month or quarter for the board. The exact format varies, but it often includes a balance sheet, an income statement comparing actual results to the budget, a list of delinquent accounts and sometimes bank statements or a check register. Your community's governing documents and board policies shape what is prepared and how often.
Start with the balance sheet
The balance sheet is a snapshot of what the association has and owes on a specific date. Look for cash in the operating account, which pays day-to-day bills like landscaping, utilities and insurance, and cash in the reserve account. You may also see prepaid assessments from owners who paid ahead, and bills the association owes but has not paid yet.
Keep reserves in their own lane
Reserves are savings set aside for future major repairs and replacements, such as roofs, paving and fencing. They are not extra money for everyday expenses. Many communities keep reserves in a separate account and plan contributions using a reserve study. When you review the reports, check that the reserve balance is moving in the direction the budget and reserve plan expect.
Compare budget vs. actual
The income statement shows what the association planned to spend in each category and what it actually spent. A category running over or under budget is not automatically a problem. Snow removal, for example, depends on the weather, and some expenses are paid once a year. Large or ongoing differences, though, are worth a question so the board can adjust before the end of the year.
Check delinquencies
The delinquency or aged receivables report lists assessments that owners have not paid on time. When delinquencies grow, the association has less cash to pay its bills, which affects every owner. Boards typically follow their adopted collection policy. Owner names and account details on these reports are sensitive, so they are usually reviewed by the board rather than shared publicly.
How to ask good questions
- Ask about trends, not just one month. A single unusual month often has a simple explanation.
- Ask what is driving a variance. Was it a one-time repair, a timing difference or a rising cost?
- Ask how reserves compare to the plan. This helps the community avoid surprises later.
- Use the right channel. Owner comment periods at board meetings and your community manager are good places to start.
Where professional accounting helps
Clear, consistent financial reports make it easier for boards to make good decisions and for owners to trust the numbers. At Accord, our professional accounting team collects assessments, processes payables and receivables and prepares monthly financial reports for the board.
Have a question?
Want to know how to request your association's financial information, or need help understanding a report? Submit a request through your HOA Portal, email info@accordhoa.com or call our office at 720-230-7303.
This article is general information only, not legal advice. Your community's governing documents and applicable Colorado law control; consult your association's attorney about specific situations.