Re: Friendly Audit / Accountant or CPA Advice Needed
From: Sharon Villines (sharonsharonvillines.com)
Date: Mon, 10 Sep 2018 09:46:30 -0700 (PDT)
I agree with Philip’s comments which I copied below because I think he covers 
the important points. Accounting and record keeping is important for several 
reasons including being financially responsible and sustainable, as well as 
providing transparency and preventing theft-but it isn’t rocket science. It can 
be easily learned by anyone who has the aptitude (ie tolerance) for numbers and 
details. No physics or calculus involved.

The online services make it incredibly easy and even gratifying work. I much 
prefer Fresh Books to Quick Books, however, but many already know Quickbooks 
and thus stick with it. Fresh Books is just a few years old and was designed as 
an online service. It doesn’t have the legacy features that Quickbooks has had 
to maintain compatibility with previous software. Most importantly FreshBooks 
speaks English, not accounting. Sometimes confronting strange language is 
disconcerting enough to make you feel a subject is impenetrable. 

Takoma Village still uses a management company to do the finances because we 
started, in my opinion, with a very conservative finance committee. I had 
worked with books for non-profit groups of volunteers before and thought it was 
over kill. I continue to think so. The services for small businesses are 
numerous and communities can use the same services that the management 
companies use for processing checks, etc. 

The most successful set-up I worked with had CPA working on an hourly basis 
with who initially ensured that we had accounts set up so we could produce the 
appropriate reports for taxes, etc., and processes for tracking receipts, etc. 
so we or our parent organization could easily do an audit. The CPA said the 
important thing, beyond accurate books, was to have a different person handle 
the checkbook (deposits and payments) and record keeping (accounting). That 
provided checks and balances. 

The CPA was also available for financial advise and signing tax returns.

A full out audit seems overkill if you have good records. An auditor just 
checks receipts and whether the books balance. It’s clerical as much as 
anything. For cohousing communities with a simple income stream and relatively 
few payments each month, it’s hard to hide money anywhere. And the online 
services ensure that no one has to interpret handwriting. 

Ask for sample budgets from other cohousing communities to set up the accounts 
you might need.


> On Sep 8, 2018, at 6:34 AM, Philip Dowds via Cohousing-L <cohousing-l [at] 
> cohousing.org> wrote:

> [snip] Accounting exists mainly to provide quick and accurate answers to the 
> financial questions that are interesting and important to you.  Thus there is 
> no single correct way to set up a chart of accounts.
>      On the income side, most of your money comes in from the monthly dues, 
> and the income accounts can be very simple.  But if for some reason your 
> community owns a rental property or runs a small farming operation, then you 
> ought to be recognizing that cash flow in separate accounts.
>      On the expense side, maybe all your money is allocated to, and spent at 
> the discretion of, committees — so maybe a chart of accounts subdivided 
> according to committees is what’s most useful to you.  Or, maybe your 
> expenses are organized around functions — utilities, building repairs, 
> insurance, activities and training, etc — and so that’s the best way to set 
> up your accounts, AND plan your annual budget.
>      Maybe some costs or collections are distributed differentially, like, 
> from the apartments to the townhouses, or from market-rate units to 
> below-market units.  If so, the design of your accounting system should 
> factor this in.

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




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