Why Strata Property Management must have updated accounts?
We don’t have updated accounts. It is common to hear Property Developers/ Joint Management Body (JMB) / Management Corporation (MC) to tell us one of their problem in managing their condominium or apartments or offices is their accounts record are not updated.
The importance of finance and accounting in Strata Property Management
Property manager, would be worried about such situation of unable to get the accounts balanced, missing funds, money in the account but unaccounted for, unable to get the account audited and any other problem unresolved relating to account matter. Thus, the need to always put utmost importance to the function of finance and accounting.
There are many ways to manage the set of accounts in the strata management operation. Of course, many property managers will place the accounting staff at site and manage the account on everyday basis. At the same time, managing agent, will at the same time allocate another staff to provide additional support of accounting service to ensure the account staff are doing his or her work accordingly.
Alternatively, property manager can also make another type of arrangement with the accounting team. The accounting service can solely be provided by the property management team via the head office. They shall support the Developer/ JMB / MC by getting all the accounting entries are properly keyed into the accounting system on the regular basis. They will also allocate another trained staff to monitor the set of account.
Another counter measure needs to be in place is, to do the account reconciliation regularly. Normally on a monthly basis. In fact, the managing agent can do the reconciliation on a more frequent basis like fortnightly. This will further minimize or eliminate any mistake made and minimize many problems.
Problems mentioned can be issues like unaccounted for funds that parcel owners transferred the funds account but never indicate for the purpose and parcel unit. In fact, this is a common issue for many developer/ JMB / MC. Incomplete accounts may lead to account being non-auditable and further complicate the compliance of annual auditing of the financial statement that is compulsory under the Strata Management Act 2013, Act 757.
This is a common issue that caused many Annual General Meetings to be postponed or delayed. This will subsequently cause more problems such as distrust of Developer / JMB / MC with some parcel owners. An accurate and updated account also will help the Developer/JMB/MC to manage their financial resources more strategically and effectively.
Conclusion
In conclusion, managing agent will always work diligently to ensure the financial reporting are done properly by having regular periodical updated reporting to the Developer/JMB/MC. The Property Manager should also raise their concern if any irregular transaction is being discovered to minimize any losses to the strata development scheme.
