July2016

CONFIDENCE... from page 17.

Another line item often overlooked in budget preparation is bad debt. Bad debt is defined as funds the association most likely will not collect. Having a good understanding of the collections and reviewing the status of those collections with the association’s attorney can help determine this key line item in the budget. Since all bud- gets have revenue (maintenance fees) to offset expenses, any uncollected maintenance fees cause cash flow problems. Bad debt can be the lead- ing cause for poor cash flow. Creating a sound budget is not a challenging process. Reviewing con- tracts, insurance and the overall spend- ing history along with short and long term needs is all you will need to pre- pare an adequate budget. The chal- lenge is communicating that process to the owners when your “number crunch- ing” results into an increase in mainte- nance fees/assessments. Associations that meet that challenge, reflect a solid board and management team who have a full understanding of the needs of the community and are making the tough decisions that are required to have a fiscally sound association. The board and management can only feel confident when all of the math works and the owners fully understands all that goes into the budget. Sometimes the message may not be received well due to an increase in fees. Explaining the numbers and how they all come togeth- er is the only path to a well-run com- munity. If the process is detailed and supportive, the board and management will have full confidence in presenting the budget to the membership. Q

Who canYOUR Association count on today for guidance in Transition and Construction Defect Litigation?

A Professional Corporation

Hueston McNulty, P.C. Defense and General Counsel Serving New Jersey, New York & Pennsylvania Value–Experience–Quality We provide our Association clients with qual- ity and value.We strive to solve the problem– resolve the issue–and make life easier for our Associations and their property managers. Samuel J. McNulty, Esq. smcnulty@huestonmcnulty.com /www.huestonmcnulty.com Tel: 973-377-0200 / Fax: 973-377-6328 Florham Park - Sparta - Toms River - Philadelphia - Manhattan

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