Condominium Reserve Studies – The Primary Financial Manager

A capital reserve study can well be considered the prime component in the financial management of a community association. Random strategies for reserve funding in lieu of such a plan can be a recipe for deferred maintenance.

A reserve study documents the commonly owned components of a condominium or homeowner association, surveys their present condition, and determines when each component needs to be replaced and the cost to do so. It then lays out a plan on a timeline telling you how to accumulate the funds needed to do those replacements. Using the recommended annual contributions to reserve, you can compute the reserve portion of your budget.

Sounds straight forward enough. But the engineering characteristics of building and site components have a decided tendency to demand a schedule of their own. For example, the typical service lives of roof shingles and bituminous concrete pavements (17 – 20 years) means that they come up for replacement at about the same time. That can create short bursts of high demand for funds followed by longer periods of lower expenses when funds can be accumulated. And of course there are other components like decks that need to be factored in.

The challenge is to be able to set a reserve funding level that responds to those peaks and valleys. Your reserve funding level that is capitalizing those big projects up ahead should not be set so high that it accumulates too much of the money of the membership when it is not needed. Using a fluctuating contribution level that attempts match the varying expenditures can be difficult when trying to satisfy the perspectives of both the board and the membership. And, of course, there needs to be a minimum balance in the reserve account in order to meet unexpected obligations, which, of course, should always be expected. Clearly, there is a need to balance these all variables in the equation. That is where a professional can help.

Tips When Choosing Your Financial Management System

It can be really hard keeping up with your business’s finances. Adding to the mix of complication would be change, which is inevitable in any commercial organisation. Whether that change occurs because of a global economic downturn or simply a move to expand the operations of the business within the city, it’s advisable to upgrade the methodology of conducting and managing your finances. This means choosing an adequate financial management system that will allow change and growth in your company, in a simple and cost-effective manner. When evaluating financial management systems from many vendors or suppliers, you’ll want to look at it from all points and not just focus on the competitive pricing. Indeed, your budget would determine which business processing system you choose but other factors such as support, security, and solutions can greatly affect the results of your investment. Check out these three following tips.

Think about the total cost of ownership.

In order to determine whether you’ve made the right investment or not, you’ll have to consider the system’s total cost of ownership – not just its actual price. Will its installation cost you more when your business’s ERP implementation methodology uses a phased rollout or a parallel adoption? Will you have to spend more to train employees to use the new system? What other costs are related to the integration of the new system?

Look for significant features.

Modern financial management systems offer up complete solutions. So you’ll want to scrutinise the functionality of the system you’re considering. Make sure it’s built with all the essential features your business will need. These may include data integrity and security, transparent and up-to-date record-keeping, tracking liabilities, coordination of income statements and balance sheets, and whatever else your business may require.

Ask about the kind of maintenance and support you’ll get.

Lastly, any kind of new business processing system may require IT support and maintenance. Perhaps your system requires updating for new functionality like supply chain management or procurement management. Will you have to pay for such an update or does it come with your maintenance and support agreement? If so, how are you able to get in touch with the supplier’s support team? Moreover, will you be able to get unlimited access? The level of maintenance and support you get will have an effect on the ease and success of your newly purchased financial system. So it pays to give it considerable thought before making that investment decision. Know more about this here.

Basics To Financial Managment – Think Like An Economist

Today, to get rich, you must know how not to get poor. To do so, you must be able to manage your finances very well. One method to excellent financial management would be thinking like an economist because they consider all aspects of a decision carefully to weigh out the pros and cons. Let us now explore how to think like an economist and how to use it to your benefit.

In the area of finance, to think like an economist, you must consider as many aspects as possible, be they financial equations, seen and unseen results, primary and secondary effects, short run and long run consequences. This is important because taking all factors into consideration will give you certainty to move ahead as you already know what will happen next.

As a result, you will have solutions for the predictable outcomes you encounter and this will greatly reduce your decision time towards them. Here, your initial work before the big decision is very tedious but as time passes by, they get simpler and easier.

Here, people must be able to look at things in the big picture. To make it clearer, this would mean knowing how things relate to and affect the whole and learning how to optimize specific products to maximize the whole instead of thinking micro where you often leave out and remove relationships to the whole.

For example, you have money in a savings account and may not get a good return on investment and if you think in micro terms, it may be lower. However, having savings can raise any deductions on home and auto insurance, reducing the cost of insurance. Here, if you look at the big picture (macro), savings can actually be good because it can lower your costs for starting other investments.

In addition, answers on micro situations are always dependent on the macro plan and this is clearly seen in the above example about how only looking at returns on savings could have made you lost a benefit for investing somewhere else.

Thus, in any case of financial management, people ought to look at things in a macro perspective because it sometimes can unlock good opportunities for yourself. Here, one example would be a fact on how knowing an investment (ethanol) well can bring you wealth in other investments.

Today, as ethanol demand rises, corn demand will increase as China and US can also make ethanol from corn which is used as food for chicken, beef whose demand rise with higher GDP per capita. Thus, an increase in ethanol demand will increase sugar (used to make ethanol) and corn demand. Here, if an investor knew of this well, he could simply have invested huge amounts of capital into these 3 investments and sit to reap his harvests.

Hence, in conclusion, after covering aspects on how to think like an economist, I believe readers can now see the various benefits one can gain from thinking this way. Now, slowly change your mindset to fit this model and I’m sure you will do well financially!

Financial Management Plan

A financial management plan helps you organize your finances to help your money grow. It also gives you the flexibility to make choices on how and where to invest your money. When you have a plan you will be able to spend your money wisely. Your plan should be able to generally be able to help you with your cash flow. The overall management of your cash flow involves evaluating your net worth after deducting what you owe. This will help you realize if you are making positive or negative financial progress.

Create a budget and stick to it. You will be in a position to promptly pay off your debts and be able to assess your spending habits. It is also advisable to include a control system in your financial management plan. This is put in place to be able to identify and avert errors as you go about your daily duties. This means that it is necessary that you should have specific guidelines when you are operating your business.

Your main priority when you are managing your finances should be to save. Do some research and get advice from a qualified financial expert on where to invest the money you want to save. It is advisable to invest with the intention of getting higher returns. Go for a solid investment and practice discipline. These are the savings that will bail you out should you face any extreme problems. Your financial management plan should also be able to accommodate taxes. This is an unavoidable area that is forgotten by many people. You should have a strategy of how you can get the most out of it.

A retirement plan is an essential part of financial management. This is the very reason you are organizing your finances, so that you are able to enjoy the years ahead. You will have no financial worries in your sunset years. That is what they will be like when you plan your finances strategically, full of sun and fun.

Financial Management: How to Stay Afloat

In order to be successful, attorneys need know a lot about a lot of things. And financial management is one of those pieces of knowledge you need to have for law practice success.

Here are 6 factors you should have a handle on:

1. Your client base. Without a sufficient number of clients to keep those billable hours going, you can’t sustain a successful practice. This doesn’t mean you have to take every case that comes your way just to keep your firm going. What it does mean is that you need to attract the clients that you want, who are willing and able to pay.

2. Good case management. The lawyers and other firm professionals must work on each case to generate billable hours. They must also make sure that too much time or unbillable time (hours spent in training, doing pro bono work, in meetings that can’t be billed, and participating in firm management) isn’t spent away from the cases. When you monitor the work by comparing the billable hours to a goal or target each month, you can have better control. It’s also important to track the unbillable time so you can see where it is spent and if that time is being spent wisely.

3. Proper billing rates. The hourly rate you charge your clients should reflect the geographical area you practice in, and the experience and specialty of all professionals working on the case. The client should be aware of who will be assisting the main attorney, and how much the hourly rate is for each so there aren’t disputes down the road.

4. Monthly billing. If you don’t bill on a regular cycle, it’s harder to get paid. It’s best if you can send a statement each month. Not only does it keep your client apprised of the work being done, but it avoids sticker shock if you bill on a less than monthly basis. Also, it may be easier for your client to pay the smaller amount.

5. Accounts receivables. If your client doesn’t pay in a timely manner, call her and make sure she received the bill. If she didn’t, resend it. If she did, remind her that it is past due. It is difficult to collect money that is more than 60 days past due, so stay on top of who owes you money and take care to collect.

6. A budget. You need to have a good plan in place for both revenue and expenses. Each year your firm should establish a new plan and review it often to make sure you’re on track. Make sure your goals are realistic and reachable and revise the numbers upon each review, if necessary. Your plan for revenue should state how much you expect to collect in fees through the year. Of course this is difficult to do because you can’t always predict the amount and timing of revenue. Your plan for your budget should also include an estimate of how much you will spend through the year. The expenses include salaries, lease payments, operating expenses, insurance, advertising and technology.

One way you can control all of these items is to have a good client accounting software program. It can monitor every factor (except the first, your client base!), and generate various reports that will help you keep your financial management organized and on track. There are a lot of choices when it comes to client accounting software, so you’ll have to take unbillable time to check them out!