CAI-NJ March 2017

MANAGEMENT TRENDS... from page 40.

Each year, any community that has delinquencies on maintenance assessments should budget a bad debt expense and should reflect an allowance for doubtful accounts on their balance sheet. This allows the community to manage cash flow for units that do not pay maintenance fees and creates a necessary account- ing method for “writing off” debts that have a low likelihood of recovery and all means of collection have been exhausted. Under accounting principles, any corporation that has bad debt should be budgeting for it accordingly. If you are not clear on how to incorporate bad debt into your budget each year or how to “write off” accounts, please contact your accounting professional to assist you. With audit season in full swing, this time of year is perfect to analyze your financials to make sure key compo- nents are included, proper entries are made and the format is easy to under- stand. Financials are a vital tool for board members and managers alike; it is important that the financials are presented accurately and in a format that is easy to understand. Special thanks to Mohammed Salyani, CPA – Principal from Wilkin & Guttenplan, PC for his help during the authoring of this article. n "...it is important that the financials are presented accurately and in a format that is easy to understand."

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