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Managing Reserve Funds

Reserve Fund Management

Every association must have at least 2 Reserve Funds (Contingency Fund and Emergency Fund).

However, there are very few transactions in this kind of accounts.  In general, public accountants show the Reserve Funds separately on the official financial statements (like an independent and separate bookkeeping) even though you don't manage your Reserve Funds individually.  

So, if it is well documented, it will be easier to reconcile the Funds and to establish the cash flow of the different Funds.

Reserve Funds Managed Inside the Current Operation Fund (Association)

As there are very few transactions in this kind of accounts, you can manage the Reserve Funds directly in the Operation Fund of the association while using some different account numbers for revenues and expenses and numbering them so that they appear separately on the Revenue and Expense Statement.  Choose account numbers after the series used for the current Operation Fund.  

Make sure to have exclusive revenue account series for Reserve Funds to show the revenues for the Reserve Funds separately from other revenues. It will also facilitate the reconciliation of the Funds by the accountant at the end of the year.  When formatting your Financial Statements via the function "Arrangement", place them separately form other operation accounts.  So, even if they are not in an individual bookkeeping, it will easy to identify these accounts.

If you have specific accounts for your Reserves and if the account numbers are all within the same series, it is sufficient to have a realistic picture of the situation, without uselessly complicating the management of Funds with a different bookkeeping. (If you are not familiar with accounting, let this aspect to accountants). 

In order to prevent questions at the general meeting, bank accounts and investment accounts in your books should be the exact image of Funds movements in the investment accounts in the financial institutions.  Make sure your accounts and the ones at the bank have the same balance.

Reserve Funds Management in an Independent Bookkeeping can be Consolidated With the Other Funds 

You can also manage the Reserve Funds separately having individual bookkeeping but consolidating all your Funds into one group. 

This group is created in order to have the financial statements (and several other reports) consolidated together .

If you want to use this method, you must create an ''association'' for every Reserve Funds where you will pass transactions in each Fund separately.   

The different Reserve Funds consolidated with the current Operation Fund constitute a ''group of associations''. 

Associations are created via File>Association Management where you will be able to create a ''New'' accounting entity for every Fund.  They are called ''association'' also because they are managed separately in Condo Manager.  So, for the computer, they are like any other 'association' no matter the name they could have, Associations, or Funds.

Thereafter, you create a Group via File>Association Group Management and select the Reserves Funds and the Operation Fund to be part of the group.  

When you want to have global reports, lists or financial statements, use such a group via the menu:  File>Open an Association Group.   

Managing Funds as Individual Accounting Entity Could Provoke Some Inconveniences 

Indeed, they are independent or they are not !  

If they are managed separately, you can't exchange any transaction, balances or information between Funds since they are managed individually.  

Consequently, don't forget that you must make changes in your owners' profile, in each of your Funds managed individually (example: at the time of a sale while using the menu: Info>Unit Sale).  Then, it will be necessary to make the ''Moving'' in each Fund.