Cohousing-L Mailing List: Re: cohousing financial records and accounting

[Sharon Villines (sharon]

> On Aug 6, 2017, at 2:46 PM, mr-personal <r3vm53 [at] gmail.com> wrote:
> 
> Out of my current interests and background in economics, I am seeking 
> examples of how cohousing entities are arranging their general financial 
> record keeping and reporting.

It would be interesting to look at how much each community spends per adult 
resident. I think that would give the best comparison. By household isn’t 
because each one is different. The main difference will be between communities 
that only have the CH as a common expense — the lot/single house model vs the 
attached dwellings where all expenses are common.

 We hire a management company to manage our finances and always have. I don’t 
think it is necessary at all and believe we would do a better job. There is 
still a lot of oversight and correction of accounting on our part. It’s like 
doing your taxes. The major task is collecting all the receipts and sorting 
them out. For most of us there is no point in then hiring someone to fill in 
forms. Accountants could hand them to their secretaries to fill out after all 
that work is done. Particularly with automatic withdrawals for utilities, etc, 
much of the monthly check writing is done.

The guidance from a CPA for non-profits is to have two people (at least) 
involved in the books — one who handles the bills and payments, and the other 
who does the accounting and bank stuff. Transparency is the best policing you 
can find. We circulate monthly statements.

 We’ve had four management companies and we’ve had many problems. They have 
lost bills and forgotten to remind us when a credit card changes to make those 
changes everyplace that we use the card. Online services don’t send bills, for 
example. Once our utilities were almost turned off because the company had lost 
the bills and didn’t notice that the account for utilities was behind in the 
monthly reports. Another time when our common internet service went down, our 
in-house techs spent two days looking for the problem in 2 modems, several 
networked routers etc. We had no internet service. Finally the techs discovered 
that the bills hadn’t been paid so service had been turned off. The electric 
gate was covered by a quarterly contract but we couldn’t get the person to come 
out automatically because he wasn’t being paid promptly.

One of the big tasks in most condos is tracking monthly fees — late and no 
payments. We have had almost no households in arrears. I’m assuming other 
communities are the same.  I can remember only two instances in 17 years. I 
don’t know about all of them but have been on the board for about half of those 
years. If there are more it would probably be another 2-3. One was because the 
person had been paying the previous years fee and had to catch up. Another had 
lost a job. Non-profits are a major source of employment in DC and they took a 
big hit in the housing bust—lowering salaries across the board, cutting staff 
and programs, or closing down altogether. Since we have had others who have 
lost jobs, they may also have gotten behind. But basically this is NO problem 
and no reason to hire a management company.

Do look at Freshbooks. It is much easier to use than Quickbooks. It’s only 3-4 
years old so it doesn’t have the baggage of Quickbooks and doesn’t use all the 
historical arcane language of accounting. It was developed as an online service 
so it doesn’t have all the baggage (like Microsoft) of maintaining practices 
from 30 years ago. Freshbooks isn’t hugely expensive and support is very good. 
Much cheaper than a management company or accountant. Support staff understands 
and speaks normal language. And it is a pleasing design. And it can import 
Quckbooks accounts. Some people use both and integrate accounts. (Accountants 
like Quickbooks and only use it because they always have.)

Our management companies want us to have fewer accounts for their convenience 
but this is our budget and each line may be overseen by a different person. 
Under the Community Team, for example, there is a line for CHIP or Common House 
Interiors. I’m point person and that is our budgeted amount. Having our own 
budget line helps me keep track of things. If the items were treated 
traditionally, those expenses would be split between several different accounts 
— furniture, maintenance, contracted services, kitchen supplies, etc. A 
nightmare for me.

We also have budget lines that one person oversees to ensure that bills are 
paid and contracts updated properly. All services related to internet, for 
example, are handled by one person because he also looks for lowest rates and 
renewals of domains, etc. We don’t automatically renew at whatever rates the 
service charges us.

This is an excellent project and will be very helpful to new new communities. 
Our pre-move-in budget was far to low and condo fees had to be increased 66% 
over the next few years. A crunch for some residents. Good financial management 
keeps the community affordable.

Sharon
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Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org