From Roof Jobs to Refi’s, Accountants Should Be in the Loop

Good management companies have expertise at running properties, but so do accountants. So boards shouldn’t leave their CPA out of the loop, especially when it comes to paying for big-ticket items. An extra set of eyes can improve a board's vision – and save money. 

A lot of times, budgetary figures can be tweaked at the end of the year. Take fuel costs, for instance. They are a big number that, as you go through the year and discover what the costs actually are, you may not have to assess as much as you had expected. Your accountant can help you keep your eye on the numbers. 

It doesn’t stop with fuel costs. I had a building that was preparing to replace its boiler, and I told the board about a property that had recently done just that – and had also installed a separate hot-water heater system while they were at it. The new system is saving them a tremendous amount of money. In addition, the life of the boiler is being extended because the boiler is not being used in the summer anymore – they’re using their hot-water heater. Less fuel is used, and there is less wear and tear on the boiler. 

One of my properties was going to refinance its mortgage. It needed an additional $500,000 to have the parapets repaired, so the board was about to take out a five-year loan. But before they did that, they called me. Instead of doing the loan, which would have necessitated an assessment over five years for all the shareholders, they spent some of their reserves on the parapet, which was going to be a two-year project, and the assessment would be spread out over five years, for a lesser amount, without loan interest or closing costs. The lesson? It would have been a mistake had they just gone right into the refinancing without speaking to their CPA first. An experienced account can give a board an extra pair of eyes. Wise boards use them. 

Jay M. Menachem is principal at Jay M. Menachem CPA.