While real estate brokers live by the old adage, Location, Location, Location, accountants define their relationships with the real estate community with another phrase: Communication, Communi-cation, Communication. While cooperatives and condominiums generally hire accountants to take care of the fiscal necessitiesthe annual financial statement, budgeting, tax returns, etc.they still need to be educated about how to maximize their relationship with these professionals. To accomplish this, cooperative and condominium clients must gain a precise understanding of their accountant's role in their business dealings. Only by keeping the lines of communi-cations open between these two parties will the accountant's services be fully realized.
Almost all co-op or condo offering plans require the board of directors to issue financial statements and provide financial information to the members of their organizations on a regular basis. In addition, laws governing the operation of co-op and condos require that they prepare certain tax filings and various reports. Board members must understand their accountant's professional responsibilities in such situations in order to avail themselves fully of his services.
In order for the accountant to perform effectively, the board must decide, in advance, how fully to integrate him into their financial affairs. Often, the extent of his involvement hinges on the fiscal stability of the building. If the building is in poor financial condition, a board may require the accountant to prepare an interim financial statement to ensure that certain corrective measures have been taken. If the building's finances remain stable, the accountant can restrict his attention to the basicsthe annual financial statement, budget, and tax return.
Positioning the accountant to perform effectively also involves determining where to place him in the communication chain. The client must decide, in advance, how the accountant should report his or her conclusions through management, or directly to the board. In addition, the board must make every effort to communicate effectively with the accountant through regular meetings, phone conversations, and other correspondence. Only by doing so can board members fully tap into and benefit from his expertise. For example, many tasks that an accountant performs can become transparent to the client, especially after board transitions. Often, a new board may operate differently or subscribe to requirements or goals that depart from those of the previous one. Only when a board maintains solid lines of communications with its accountant can his input and work be appropriately considered by board members. After all, the accountant has read the minutes of their meetings, allowing him to respond with suggested solutions to issues as they are developing. Chances are that he possesses the knowledge to solve problems that board members might not even be aware of.
One of the first tasks that a board president must undertake is to designate a board liaison, normally the treasurer, who can work with the accountant directly. The treasurer should keep the accountant informed of specific ffb developments, speaking to the accountant on a day to day basis and relaying important information gleaned from these exchanges to the board.