“The best thing to do is to get a financial committee going and have everyone look at it,” says Stephen Beer, a CPA and partner at Czarnowski & Beer. “I love it when I get detailed questions from more than one person.”
Mindy Eisenberg-Stark, a CPA who works with condo and co-op boards, says the gold standard would be to divvy up the job so that more than one person on the board examines the monthly report. “It would be great to have one person look at accounts receivable, and someone else look at paid and unpaid bills,” Eisenberg-Stark says. “In reality, there is usually only one person looking at it, if anyone is looking at it at all. We find that the buildings that get into trouble are the ones who are not paying attention.”
When doing that review, remember: you should look at the reports from a “big picture” perspective. As Thomas Thibodeaux, CFO of New Bedford Management notes: “If you’re looking at it and saying ‘Why did we pay $3.50 for a mop head when I’ve seen them for $2.50?’ – that’s not the best use of your time. You want to have a large overview of your financial health.”
In the final analysis, such reviews are crucial, since the more you know, the better off you are. Say you start having budgetary problems because of a heavy winter and added heating expenses. You’ve blown through a good chunk of your budget already, maybe some other bills went unpaid. Now let’s say that a new resident is trying to buy into your building, and they go to the bank for their loan.
“You start getting calls from people saying that the bank is telling them there are problems with your building’s financials,” says Beer. “If you keep an eye on things, you can help prevent those situations.”
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