5 Condo Budgeting Terms You Should Know

Whether you just got elected to the board of directors or you’ve served for years, you want to make a good impression. Knowing these common condominium budgeting terms will help you sound like you know what you’re doing while you get up to speed, or serve as the refresher you need to keep growing as a community leader.

BUDGET:

The financial plan for a corporation which estimates income and expenses for a specific time period.

BALANCE SHEET:

The balance sheet is the report that gives the corporation’s financial condition. A comparison of the assets of the corporation minus the liabilities gives the net worth.

GENERAL LEDGER:

The general ledger contains the accounting record for each transaction in numerical order (chart of accounts) and occurrence (date order). This accounting tool allows the board of directors and condominium manager detailed information tracking the financial transactions of the corporation.

RESERVES:

Funds set aside by a condominium corporation for the future repair or replacement of major components the corporation is obligated to maintain.

STATEMENT OF INCOME AND EXPENSE:

The statement of income and expense is probably the most important management tool a board of directors and condominium manager have available to them. The monthly review of the statement of income and expense will inform the board of directors and condominium manager if they are on plan compared to the budget (projected income to date and projected expenses to date). It also allows the board of directors to make educated decisions concerning expenditures for service.