What reports should come standard from a financials-only engagement

The whole point of a financials-only engagement is that a board stops guessing about its money. That only works if the reports arrive on time and actually make sense. Before you hire a provider, know what a complete reporting package looks like so you can hold the engagement to it. This is the standard you should expect.

The monthly package

A competent provider delivers the same core set of reports every month, on a predictable schedule, in a format the board can read without an accounting degree.

• Balance sheet. A snapshot of what the association owns and owes, including operating and reserve cash balances. This is where you confirm reserves are where they should be.
• Income and expense statement (budget to actual). Actual revenue and spending against the approved budget, with variances. This is the report that catches overspending early.
• General ledger. The detailed transaction record behind the summary statements, so any number can be traced to its source.
• Bank reconciliation. Proof that the books match the bank, for every account. An unreconciled month is a warning sign on its own.
• Accounts receivable aging. Who owes what and for how long, so the board can act on delinquencies before they grow.
• Accounts payable and check register. What was paid, to whom, and what is still outstanding.

Together these let a board answer the only questions that matter month to month: do we have the money we think we have, are we on budget, and is anyone falling behind.

The annual and year-end items

Beyond the monthly rhythm, expect support for the once-a-year work:

• 1099 preparation for vendors, so the association meets its filing obligations.
• Audit-ready or review-ready records, organized so an outside CPA can work efficiently and the engagement does not balloon.
• Budget preparation support, giving the board clean prior-year actuals to build the next budget on.

A financials-only provider does not have to be your auditor, but its records should make the auditor's job easy.

Red flags that your reporting is falling short

You do not need to be an accountant to spot trouble. Watch for these:

• Reports that arrive weeks late, or on no consistent schedule.
• A balance sheet with no reconciliation behind it.
• Numbers that change from one month's report to the next with no explanation.
• No AR aging, so delinquencies stay invisible until they are large.
• Statements the treasurer cannot explain to the rest of the board.

Any one of these is worth a direct conversation. Several together mean the engagement is not delivering what you are paying for.

Set the expectation before you sign

The cleanest way to get good reporting is to define it at the start. Ask a prospective provider for a sample monthly package and confirm the delivery date each month. If what they show you matches the list above and lands on time, you have found the right fit.

Common Elements does not produce these reports. We connect boards with independent financials providers who do, and who are used to delivering a full monthly package.

If you want a provider that delivers board-ready reporting on a reliable schedule, tell us about your association. Free for boards.