- September 16, 2018
- Posted by: Scott Setterlund
- Category: Business plans, Community, Finance & accounting, HOA
There’s an interesting paradigm shift occurring in Idaho homeowner associations (HOA) that is sweeping across the state. This shift is the result of the Internet, because it is allowing homeowners the ability to access information. Homeowners have long realized that they share in their Board’s financial accounting mismanagement failures, errors and omissions, but were unable to validate any fault. Today, the financial liability is so high that Board members realize they may by personally liable and are seeking to protect themselves.
Online HOA accounting has a dual purpose: to mitigate a Board’s control and alleviates any litigation. Board members volunteer their time and often run to be on the Board for personal reasons. This may produce a self-serving or a conflict of interest that presents an immediate threat to the association. A Board member who has access to their HOA’s financial records discovers an attractive place for false reporting, under-reporting or failure to report.
Village Management Software (VMS) is an independent financial tool designed specifically for HOAs as an adjunct to replace anyone who directly handles financial records. The cost of the program is considerably less than hiring a bookkeeper.
VMS is not just a single program, such as Excel or Quick Books which are typically used by HOAs. It is a suite of association-specific financial tools that include compliance, collections and delinquency controls.This program allows the Board and the entire HOA to interact, access and communicate in real time, resulting in many improved financial controls and transparency.
VMS is set-up similarly to your utility bill, which by the way, are managed by independent, third party services that are contracted by your power and garbage providers. VMS provides a fully integrated accounts receivable, accounts payable and general ledger modules. These are tasks that a volunteer Board member would have had to do, which would save them an enormous amount of time, remove a biased individual from falsifying reports, reducing your association’s exposure to risk and mitigating increases in unplanned assessments.
VMS sells the software to individual HOAs, but many HOAs do not want further increases in their homeowner’s dues. It is not cost-effective for HOAs to purchase independently.
MGM Association Management is the only association manager in the State of Idaho that has purchased the administrative rights to VMS. Because of this, MGM can pass all of the program’s benefits along to an HOA of any size. In comparison to other management companies, MGM can include all the VMS services in its management programs. In this way, HOAs can remain independent without having a management company involved. It is ideal for HOAs looking for financial accountability, costs less than hiring a bookkeeper, increases transparency and keeps homeowner dues low.
If you are looking to update your HOA’s financial accounting, reduce liability, improve compliance and redirect your Board’s focus on the positive aspects of your community, VMS is ideal for today’s Internet savvy association. Look into MGM Management and how they have transformed many HOAs to become more solvent. You can reach MGM at (208) 846-9189 or https://www.gomgm.com.