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Property leadership topic

Finance and reserves

Connect the adopted budget, available cash, reserve studies, and actual commitments.

A connected decision sequence

Use the guides in the order that matches your current decision. Keep the evidence, approval, and next action connected as work moves between the board, management, vendors, and specialists.

  1. Reconcile actual results and commitmentsWhich balances are available for this purpose?
  2. Connect budget and reserve planningWhat commitments are missing from the forecast?
  3. Test cash timing before approving expenditureWhen does payment fall relative to collections?

Guides in this topic

Build the decision record

For the issue in front of you, name the responsible sponsor, collect the current source records, list material gaps, and identify the acceptance test. Retain a version of the evidence used at the decision date so later changes remain explainable.

These resources provide operational frameworks. Property-specific technical conclusions, deadlines, funding authority, and coverage decisions need the applicable records and appropriate professional review.

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Discuss a focused review

Read results, commitments and cash together

Review the adopted plan, what has been incurred and when money must move. Reconcile records before explaining a variance. Preserve restricted-fund rules and have the appropriate adviser determine funding authority.

Interpretation checks

  • A positive bank balance does not identify how much is uncommitted or permitted for a purpose.
  • Under-budget expense may mean delayed work or an unrecorded invoice. Establish the cause before calling it a saving.

Questions for this decision area

Does budget approval guarantee cash?

No. Expense recognition and payment dates can differ. Keep a cash schedule for deposits, collections, commitments and restricted balances.

How should an unexplained variance appear?

Show amount, source period, known components, unresolved question and evidence owner. Keep hypotheses separate from confirmed explanations.

Follow a connected review · Check terminology

Evidence at each handoff

What permits the next step?

A task being finished does not establish that its output is ready for the next team. Use these checkpoints to keep the evidence, responsibility and release condition connected.

  1. Reconcile the basis

    Record to obtain
    Ledger, period, classification and supporting records
    Suggested coordination role
    Financial preparer
    Check before release
    Unexplained differences and missing postings identified

  2. Explain commitments

    Record to obtain
    Executed agreements, estimates and payment sequence
    Suggested coordination role
    Budget coordinator
    Check before release
    Firm obligations distinguished from assumptions

  3. Obtain the funding decision

    Record to obtain
    Permitted purpose, approving authority and dated cash forecast
    Suggested coordination role
    Authorized decision maker
    Check before release
    Cash timing and unresolved funding interpretations visible

  4. Verify settlement

    Record to obtain
    Acceptance, independently verified payee and reconciliation
    Suggested coordination role
    Payment reviewer
    Check before release
    Payment matched to authorized obligation and recorded correctly

Proposed operating workflow, not a universal legal sequence. Confirm authority, professional requirements and permitted parallel work for your property.

Work through a decision in this area

Use this when a budget line appears sufficient but the timing or permitted funding of a payment is unclear.

Hypothetical example: A hypothetical USD 24,000 payment is due before an expected collection. The brief shows the confirmed due date, account restrictions, existing commitments and collection uncertainty instead of assuming the bank total is spendable.

What would demonstrate closure?

Reconcile the forecast to the approved payment and permitted funding source. Preserve unresolved collections and commitments; an adopted budget does not by itself establish available cash on the due date.

Review the decision brief structure
A number, its evidence and the decision

Cash timing can change a decision before the annual total does

A balanced annual plan can still have a difficult payment month. Compare available operating cash with near-term obligations, and separate restricted balances from funds actually available for the stated use.

  1. Opening cash

    Reconcile the balance and permitted use.

  2. Receipts

    Identify expected dates and collection assumptions.

  3. Commitments

    Schedule approved and recurring payments.

  4. Decision

    Review the lowest projected balance and its uncertainty.

A worked example with visible assumptions

With fictional available operating cash of $180,000 and monthly outflow of $45,000, the simple ratio is four months. This assumes no receipts and steady outflow. It excludes restricted reserves, payment spikes and receivable risk; use a dated cash schedule for a funding decision.

Original hypothetical arithmetic example. The amounts describe a fictional scenario, not observed property performance or a recommended target.

Continue with HOA and Condominium Cash Flow Planning

Explore the calculation

Enter non-negative values using the same scope and period. This calculation stays in your browser tab.

Use the example values or enter your own, then calculate.

Read restrictions before totals

A combined bank balance can include money unavailable for operating expenses. Reconcile account purpose and applicable restrictions.

Timing is material

Insurance premiums, project deposits and annual fees can make a flat monthly average misleading. Plot their actual payment dates.

A ratio is not a funding approval

The calculation describes entered amounts. It does not determine lawful reserve use, approve an assessment or establish a universal cash target.