Budgets

Can you tell a good story?

Learn how to present financial statements effectively at AGMs with our SOP. Overcome common challenges like inaccurate reports, accounting errors, and variances, and build trust with your clients through clear financial storytelling.

By
Michael Teys
on
January 24, 2025
Category:
Governance

One of our clients this year described the presentation of financial statements as story time – the accounts tell the story of the owners corporation for the past year. 

Understanding the financial statements and being able to answer questions about them at the AGM is fundamental to great strata management. Our Standard Operating Procedure for this task will put you in a strong position to impress your clients and gain their trust. 

This preview is an extract from our SOP (Victoria) for presenting financial statements. It features two of the eight sections of the SOP – a description of the task, and common roadblocks and solutions. The roadblocks are the same in every state and territory.

Financial Statements

1. What is the task?

This task is about presenting financial statements to the AGM of owners corporations.

The financial statements include an Income and Expenditure Statement for both the administrative and maintenance funds. They also include a statement of the owners corporation's assets and liabilities.

8. What are the common roadblocks to producing timely and accurate financial statements?

  • Not holding AGMs each year as required.
    Solution: At the end of each AGM, agree the date for the next AGM, and enter this into the shared diary. See also the Operating Procedure for holding AGMs.
  • Lazy and incorrect accounting will lead to inaccurate financial reports. They will present a misleading account of the scheme’s financial position.
    Solution: Double and triple-check entries on the ledger, perform quarterly audits, and diarise and organise your financial records effectively.
  • Using incorrect accounting codes.
    Solution: Use accounting codes specific to the scheme’s budget.
  • Not understanding or misinterpreting variances.
    Solution: Some variance is inevitable throughout the year with unforeseen circumstances arising. Minimise the variance before the AGM by changing the accounting codes in the general ledger for uncategorised items.
  • Understanding brought forward balances from the previous manager.
    Solution: Check the general ledger. Ensure income and expenses are coded correctly.

Some of these roadblocks, and the solutions, might seem obvious. But, in the busy day-to-day running of a strata management business, it can be easy to put off the work solutions…. until tomorrow. Then you are under pressure, working late to get them out at the last minute, and you are more likely to make a mistake. 

Our Operating Procedures, and solutions to roadblocks aim to help you. They should give you more time today, so you don’t have to put things off until tomorrow.

If you would like to learn more about our Complete Standard Operating Procedures System, book a free 30-minute call with me to discuss your needs.

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Michael Teys

Michael Teys is the Founder and Chairman of The Strata Professionals Australia. He brings together more than 30 years of specialist strata law practice, a decade of strata business ownership, and an active programme of academic research into multi-owned property governance.