Category: Services

ACCOUNTS RECEIVABLE

FINANCIAL MANAGEMENT

MANAGEMENT REPORTS

The Monthly Management Reports are provided to the Board prior to the Board meeting and is divided into two main sections. The first section concerns the financial condition of the Association, and the second section, the management action items.

BUDGET

The budget establishes the financial lifeline of the community. The budget process is one of the most important activities that Northern Virginia Management, Inc. Associates and the Board work on each year.

The budget is broken down into both short-term and long-term finances. The short-term budget is the yearly financial plan for the Association’s operating budget. Long-term planning is achieved through the development of a comprehensive and accurate replacement reserve schedule, which summarizes the Association’s anticipated major capital expenditures over an extended period of time.

The budget process is a collaborative effort between the Board, Committee and the Community Manager. The Community Manager provides all the information from a variety of sources, including Northern Virginia Management, Inc.’s accounting department, on-site personnel, Board members’ meeting minutes, and Committees. This coordination allows the Community Manager to take a global approach to the budget, to develop what he or she feels to be in the best interest of the Association. Since the Community Manager has a working knowledge of the budget process and the Community, he or she will be more sensitive to budget guidelines through the upcoming fiscal year.

The ultimate goal of the budget process is to ensure a healthy and financially stable community, in addition to providing specific guidelines and objectives for the Board and Northern Virginia Management, Inc. Associates to follow.

ASSET MANAGEMENT

Northern Virginia Management, Inc. also provides asset management. Northern Virginia Management, Inc.’s Comptroller and accounting staff, in conjunction with the community manager, maintain constant contact with local banks and institutions to maximize returns on the Associations investments. Each week, Northern Virginia Management, Inc. contacts a selected list of banks, savings and loans, and the Treasury to determine where the highest returns are being paid and advises the Association where funds can be invested. Depending on the Association’s goals, it may be appropriate to invest in Treasury bills or certificates of deposit.

DELINQUENCIES

Northern Virginia Management, Inc. has an ongoing, effective delinquency program. After reviewing the Association’s governing documents, Northern Virginia Management, Inc. makes recommendations for implementing a delinquency policy, if one does not exist. If one does exist, Northern Virginia Management, Inc. will follow it. Northern Virginia Management, Inc.’s standard procedure for handling delinquencies is that after the 10th or the 15th of the month, depending on the Association’s policies and governing documents, Northern Virginia Management, Inc.’s accounting department generates and forwards a delinquency notice to the owner. A late charge is applied, if permitted. If funds have not been received in another 15 days, it is then followed up by a second delinquency notice. After that time, depending on the policy of the Association, records are turned over to the association’s collections attorney. Collection action then becomes a legal matter and advice is rendered for acceleration of fees, if provided, foreclosure against the unit, or other legal remedies.

FINANCIAL REPORTING

Northern Virginia Management provides the Associations we manage a number of financial reports on a monthly basis. Several of these are highlighted below.

The Balance Sheet outlines assets, liabilities and equity in an easily read, standard accrual accounting format. Supplementary schedules to the balance sheet are provided as appropriate showing details of investments and fixed asset and equity accounts.

The Schedule of Sub Accounts breaks down the Association’s reserve funds into specifically earmarked items (such as sidewalks and roof replacements). These schedules are amended monthly to include contributions and disbursements for that month.

The Working Capital and Capital Replacement identifies each month’s accounts, their maturity interest rate, and current contribution and balances.

Accrued Expenses are a listing of the accruals, which have been made for major expenses which have been incurred, but for which cash has not yet been expended.

The Comparative Summary of Income and Expenses provides a point of comparison between actual monthly income and expenses to amounts budgeted for that month, and also the status of year-to-date income and expenses compared to the budget. Many kinds of expenses, such as utilities, fluctuate over the course of the year. These variable expense items are detailed in a month-to-month projected schedule and result in the greatest possible degree of budget analysis and comparison.

The Monthly Spread Report displays actual expenses year-to-date and budgeted expenses for the balance of the fiscal year, giving the Board the tools to make sound financial decisions on a monthly basis.

The Schedule of Open Invoices is a listing of any invoices, which are unpaid at the end of the month. Accounts Receivable Status lists all co.-owners with a balance in their account at month-end. The details for any delinquent balances are shown here.

Monthly Disbursement Summary lists every disbursement made for the month including payee, account number charges, and amount and check number.

Monthly Cash Receipts is a detailed listing of all cash received during the month including all miscellaneous cash receipts and the account which was credited. In addition, a preliminary General Ledger is reviewed each month by the Community Manager and accounting personnel before preparing financial statements. This preliminary review together with reconciling the bank statements allows for any corrections resulting in more accurate financial statements. The speed and accuracy of Northern Virginia Management, Inc.’s accounting system is outstanding. Additionally, within 30 days of an Association’s fiscal year-end, all records are ready for the annual audit. At the close of an Association’s fiscal year, a cumulative general ledger as well as an audit adjustment sheet, balance sheet schedules, bank statements and reconciliation’s, a trial balance, and copies of contracts, etc. are provided. These tools are used by the Association’s auditing firm during their review of finances. Any adjustments made by the auditor are then incorporated by Northern Virginia Management, Inc.’s accounting department to ensure accuracy and consistency. An additional feature is Northern Virginia Management, Inc.’s ability to adapt the chart of accounts to suit the Association’s specific needs.