Housing societies and gated communities do not have a profit/loss module to generate income. They are independent and self-reliant entities. The other residents financially contribute by paying maintenance and other amenities charges.
Efficient financial management is the Management Committee’s top priority. The residents trust their hard-earned money with the Management Committee and these are not smaller amounts either. The Management Committee is responsible for lakhs of rupees or if the society is large, crores of rupees. Therefore, efficiency and transparency are vital.
Every year, financial auditing takes place, and the financial statements are evaluated including balance sheets (profit-loss), cashbooks, ledgers, loans, lendings, borrowing, etc. Besides, the Management Committee has to submit a detailed analysis of these financial statements to the residents during the AGM (Annual General Meeting).
The Treasurer is responsible for the finances in a housing society and if they are found to be insincere or negligent, or any financial discrepancies are found, they might lose their position. On the other hand, the committee is also responsible for filing income tax, paying bills, maintaining assets, managing funds, etc.
Income of Gated Societies
Societies have only a handful of primary sources of income and these incomes can be classified into two groups – member (internal) income and external (non-member) income.
Maintenance and parking fees, non-occupancy charges, fees required to pay for property transfer, membership deposit, interests generated via investments, fixed deposits and dividends, and additional interests paid by defaulting members are considered member (internal) income.
When outside members use the premises of a housing society, they are required to pay a fee, which falls under non-member or external income. Great examples would be billboards/advertisements placed inside the housing complex, rents given by store owners and vendors (kiosk, grocery, stationery stores, pharmacy, etc), and rentals provided by mobile towers.
Gated communities also have their share of expenses. They have to ensure that the apartment is well maintained and all the staffs are taken care of. These are important for the seamless functioning of society complex.
Some of the common expenses are,
- Maintenance of assets and equipment, repairs, building reconstruction, and other amenities.
- Maintenance of lifts, parks, and other common areas.
- Proving salaries for regular staff (cleaner, security) and office managers.
- Regular annual maintenance expense of pool, lifts, gym, and electronic equipment.
- Paying water bills and maintaining common bulbs and tube lights.
- Paying electricians, plumbers, and cleaners hired for common areas.
- Bearing religious, cultural, and other celebrational activities.
- Expenses that arise due to the installation of smart meters, solar panels, waste treatment, rainwater harvesting, etc.
Managing the income and expenses
The best way to manage the expenses of the gated community is to go digital. Abandoning the old-fashioned ledgers is not only good for the environment but also pragmatic. With modern and smart accounting software, societies and Management Committees can easily keep up with their accounts and stay organised. Some of the advantages of using accounting software are listed below.
Finding receipts and invoices entered on paper might take forever to find, especially if there are multiple invoices filed over years. With accounting software, the Accountant or Treasurer can upload invoices and receipts in bulk to the software’s dashboard and simply look up the present and past transactions by entering the details or invoice number.
No-room for manual errors
Accounting software or application comes with several automated and smart features. Invoices can be scheduled without any manual intervention, the amount per resident is automatically calculated according to the area size (sqft), past arrears, advance payment, discount if any applicable, etc. These features come in handy especially during financial reviews and government audits. This also eliminated human errors.
With the help of accounting software, even complex reports like TDS, GST, BOS, etc can be easily generated and financial management can be kept as transparent as possible. Additionally, individual resident reports, income and expense reports, balance reconciliation, defaulters reports, financial transfer reports, general ledger, and reports of security deposits can also be effortlessly generated.
Effortless dues collection
The Accountant or Treasurer can send automated bills to other residents and remind them to pay their dues using accounting software. Group or single invoices can also be created. Likewise, the invoices can be sent both to the entire society or target particular blocks or wings. On top of these, the software also enables the users to issue fines and additional charges to defaulters and generate invoices based on it. Credit reports are also generated according to the invoices issued.
Online payment options
The option to pay online can be integrated with accounting software thus enabling the residents to pay at the comfort of their house. The Accountant/Treasurer can also easily track the transactions made and keep tabs on overdue. This feature is particularly convenient if the Management Committee is dealing with more than a hundred flats (100+ monthly incoming payments) in larger societies with several wings.
To sum this up, with the assistance of smarter technology and digital accounting, the tedious process of financial management can be made easy and can ease the burden of other stakeholders in an apartment complex.
Apart from the ability to upload and download a tremendous amount of paperwork, the software can generate reports instantly and help with dues collection promptly. To keep financial matters more secure and prevent tampering of files, the Management Committee can give access only to a select set of people.
In this period, going digital is the best way to handle finance in a gated community since their benefits are numerous. It is also noteworthy that it offers exceptional convenience as well. The ApnaComplex software brings you state-of-the-art Billing & Collection solutions. With the use of the smart application, the Treasurer and Management Committee can sort various financial procedures which might otherwise take days to sort.
Not only finances, with ApnaComplex software, top-notch security can also be deployed in your apartment complex. Additionally, communicating with other residents has never been easier. Recently, we have introduced the CORONA SHIELD feature to fight this pandemic efficiently. To manage your apartment complex with ease, get in touch with our representatives. Visit https://bit.ly/371rCxL and request a demo. Our team will get back to you ASAP!