In any Homeowners’ Association HOA the biggest deal of all is having a well-managed, dedicated bank account. This is not only an account that holds all of your residents’ dues, it is the center point of all community finances from paying for large capital improvements such as new houses or pools to the day to day costs of landscaping and best bank account for hoa maintenance. So finding the right banking partner for your HOA is one of the most important decisions a board can make. Not only can the wrong bank account attract hidden fees, increase admin headaches and frustrated residents. But the right partner can simplify operations and increase transparency and even help your HOA bring in long-term value to the community. This guide will break down the confusing process and help you identify the best bank account for your HOA, with a special look at how modern financial technology, such as Baselane’s, is transforming HOA banking.
Why Your HOA Needs a Dedicated Bank Account
Before you take a closer look at what makes a great account, it’s important to first understand why every HOA should have a separate account. It’s important to know where the money is put. When you mix Baselane HOA funds with your own personal finances, you violate your fiduciary responsibility and risk legal fees, failure to pass an audit, and a complete lack of trust in the community. A dedicated account makes it easy to keep track of who has access to what money. It makes it easier to audit, and has a clear audit trail for any collected money. In addition, it ensures the board members have complete trust in the association as well, ensuring that community funds are used exclusively for the benefit of the association. You’ll want to set up a separate account for the operating fund, which is money that is collected to pay for monthly, ongoing expenses such as utilities, insurance, maintenance and management fees. Many associations also want a separate reserve fund account for large-scale projects and are prepared to keep these in reserve. For instance, they may decide it’s time to resurface roads, replace roofs, or renovate common areas. A separate reserve account makes keeping the money in reserve a better plan for the future, as they don’t want to drain any reserve money to cover non-essential operating expenses.
The Modern Approach Banking Built for HOAs
There’s been a new era of financial technology building from the ground up to tackle the real pain point’s community associations face. This new kind of technology allows for banking to work hand in hand with powerful community association management tools. And that’s where Baselane comes in. Meanwhile, this new kind of technology doesn’t focus solely on the banking side. These software companies develop services around your HOA: the lifecycle of your community association. That means you can still give your HOA a dedicated FDIC insured checking account, but once you’re done, it’s complete with a host of features that will help save you time, reduce errors, and provide extraordinary insight into the financial health of your association. The goal of this type of technology is to simplify the diverse tools a board typically uses into one powerful toolkit.
How Enhances the HOA Banking Experience
Is the latest development in merging banking with HOA management software? Starting with a free interest earning checking account specifically designed for community associations. All of these features make Baselane the best bank account for HOA. And that’s just the bank account; there are other features that are as powerful as the bank account itself. The integration of payments processing: Instead of chasing checks, boards can set up a resident portal where homeowners can pay their dues online via ACH or credit card. Payments are automatically linked to individual homeowner accounts, so there is much less administrative work involved to ensure that only those paying your dues have done so. This also eliminates the hours of data entry and reconciliation required to ensure that you don’t miss the money owed. The time your treasurer spends entering and reconciling accounts is greatly reduced and you can focus on getting your board or members back on track. Comprehensive accounting tools: Instead of categorizing income and expenses manually, uses an automatic revenue and expense reporting program that automatically categorizes items. It also provides accurate financial reports to help you stay organized and keep track of the budgets you create. When tax time comes around, being organized and having all financial data organized together makes filing your tax returns a much easier task.
Making the Switch A Step by Step Guide
If your current banking arrangement isn’t working for your community anymore, switching banks can be a simple process. First, you’ll need to check your HOA’s governing documents to make sure that there aren’t any specific restrictions on where you can bank. The next item on your list is typically your EIN letter from the IRS, the HOA’s organizing documents bylaws, CC&Rs, and a corporate resolution approved by the board authorizing the account opening and assigning the signatories. Once you’ve chosen your new bank whether traditional or modern you can often apply online to open the account. Once your new account is active, you’ll need to change any scheduled automated payments and direct deposits. Include your vendors’ ACH payments on your new account as well as the account information for future recurring income, such as rental income to cover community property. It’s still best to have the old account open at a small balance for a few weeks so that it can catch any stray transactions before you officially close the account.
Conclusion
It’s not just about saving money; it’s about choosing the right bank account to help empower your board to do what it’s there for better. But you’ll have more of an impact if you do so. Why should I choose the best bank account for my HOA? When it comes to financial institutions, it’s often about getting away from fees in the short term because you prefer to keep your money in a trusted institution. But when it comes to finding the best bank account for your HOA, you want to keep your money safe in a community where you trust your community’s bank account, as well as your employees’, and your communities. When your board chooses a low-fee, digitally-comfortable, integrated management system, they’ll be freeing up time, resources, and effort to focus on its mandate to improve the quality of life for all residents. When selecting the best bank account for your HOA, think beyond just what money may be going into for the short term. While allowing your board the flexibility to focus on something their community cares about, focusing on what will help keep their community financially strong is going to be a much bigger piece of the puzzle.
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
