Financial management is an important part of strata management and this includes budgeting, administration and stewardship of funds. Strata managers have an important role to play when it comes to overseeing the financial matters of strata schemes.
You can look for strata management from Body Corporate Services and visit their website to get a comprehensive understanding of what they can bring to the management of your property. Budgeting is an important part of financial management and this includes forecasting the expenses and income of the property. There should be financial goals and priorities set so that funds can be allocated for capital expenses and operational expenses. A comprehensive budget will be developed by the strata managers so that they account for repairs, routine maintenance, administrative costs, insurance premiums, contingency funds etc. Once a realistic budget is established along with a sound financial plan, the financial sustainability of the strata scheme can be ensured. To ensure transparency, there has to be accurate recordkeeping that is up to date. This should comply with regulatory requirements. Meticulous records of financial transactions, invoices, receipts etc. should be maintained. And these should be accessible, organised and documented property. Strata managers will also prepare financial reports and distribute them to the property owners and strata committee so that they can provide insights into the financial health of the scheme.
There has to be effective cash flow management
So that the strata scheme has sufficient funds to meet its financial commitments. The cash flow and outflow are monitored by the strata managers carefully. With ongoing monitoring, they will be able to anticipate cash flow fluctuations and this allows them to manage effective liquidity. Measures can be implemented to optimise the collection of revenue along with prioritising payments to creditors and service providers. There can be unforeseen contingencies or major capital expenses and to cover these, you need to have reserve funds. Some examples are building repairs, upgrades and maintenance. The reserve funds will be managed by the strata managers carefully so that they can ensure adequate funds are available to preserve their purchasing power over time. There should be regular assessments carried out of the strata scheme’s capital needs. The strata managers will review the reserve fund balances and come up with solutions and strategies to replenish it and expand it so that it can meet future needs.
It is important to adhere to legislative requirements and regulatory frameworks
When it comes to the financial management of strata schemes. The strata managers will ensure that they comply with the relevant state legislation for strata along with taxation laws, accounting standards and requirements for financial reporting. They will stay updated on changes to the legislation and regulations. Insurance is required to mitigate risks and protect the assets of the strata scheme and strata managers will procure appropriate insurance and maintain it. Some of the coverages provided by them are building insurance, office bearer’s liability insurance and public liability insurance. They will assess the insurance needs of the strata scheme to make sure that the coverage is adequate.