Association: _______________________________________________
State: ____________ Property type: ☐ Condominium ☐ Cooperative ☐ HOA ☐ Other
Fiscal year end: ____________ Basis of accounting: ☐ Accrual ☐ Modified accrual ☐ Cash
Prepared by: _______________________________________________ Date: ____________
How to use this
A chart of accounts is the one document that decides whether your financial statements can answer a question. If the accounts are wrong, no amount of care later recovers it: the budget will not tie to the actuals, the reserve balance will not be defensible, and the auditor will rebuild your books before they can report on them.
This chart is written for any state. The numbering scheme, the fund separation, and the account structure are ordinary accounting practice and do not change at a state line. What does change is the statutory layer on top: whether reserves must be separately accounted for, what financial report the association owes its members and at what revenue threshold, and whether an audit, review, or compilation is required. Part 0 makes you answer that before you adopt anything here.
Adopt this in one move at a fiscal year start if you can. Mid-year conversions require a crosswalk of every open balance, and the year's budget-to-actual comparison stops meaning anything in the month you switch.
Fill-in fields appear in square brackets. Delete the guidance boxes marked "Builder note" before you circulate this.
Part 0. Establish your state's requirements first
☐ Does state law require reserves to be separately accounted for from operating funds? Answer: ______________
☐ Does state law restrict what reserve funds may be spent on, or require a member vote to use them for another purpose? Answer: ______________
☐ What financial report does the association owe its members each year, and is the requirement tiered by revenue or unit count? Answer: ______________
☐ Is an audit, review, or compilation required, and at what threshold? Answer: ______________
☐ Is there a required deadline for delivering that report to members? Answer: ______________
☐ Does state law prescribe how assessments received are applied across principal, interest, late fees, and costs? ______________
Answer:
☐ Does state law govern interest on reserve accounts, or where reserve funds may be held? Answer: ______________
☐ Does the declaration or bylaws impose anything stricter than the statute on any of the above? Answer: ______________
Builder note. The assessment-application order in the sixth question is the one people miss, and it is not a bookkeeping detail. In many states the order is fixed by statute and cannot be varied by the association, which means the receivable accounts below have to support it. Get that answer before you go live.
1. What a chart of accounts has to do
Four jobs. Every structural decision below serves one of them.
Keep operating and reserve money apart so the reserve balance is provable at any moment without reconstruction.
Tie to the budget line for line so budget-to-actual is a lookup, not an exercise.
Carry the reserve component structure so the reserve schedule and the ledger agree on what a component is.
Survive an audit so the accountant reports on your books rather than rebuilding them.
2. Numbering
2.1 Choose a width and hold it
Use four digits. Three runs out inside the expense blocks the first time you split a category. Five is more structure than an association of any size needs, and it invites a sub-ledger nobody maintains.
2.2 The blocks
| Block | Contents |
|---|---|
| 1000 to 1999 | Assets |
| 2000 to 2999 | Liabilities |
| 3000 to 3999 | Fund balances and equity |
| 4000 to 4999 | Revenue |
| 5000 to 7299 | Expenses |
| 8000 to 8099 | Reserve funding, operating side |
| 9000 to 9999 | Reserve fund activity and components |
Be honest about the expense blocks. There is no industry convention for where expenses start. Every accounting package ships a different default, and every one of them is presented as the standard. Because there is no convention to inherit, this chart picks one and holds it so the reserve pairing in section 7 works:
| Range | Group |
|---|---|
| 5000 to 5599 | Administrative, professional and payroll |
| 5600 to 5699 | Insurance |
| 6000 to 6299 | Utilities |
| 6300 to 6599 | Grounds and landscape |
| 6600 to 6899 | Buildings and common areas |
| 6900 to 6999 | Security and access control |
| 7000 to 7199 | Amenities and recreation |
| 7200 to 7299 | Contingency and non-recurring |
If your association already uses a different expense layout and it works, keep it. Consistency with your own history is worth more than agreement with this document. What matters is that the scheme is written down and that nobody adds accounts outside it.
2.3 Rules that keep the scheme usable
☐ Leave gaps. Number in tens, not ones, so a new account fits where it belongs instead of at the end
☐ One account, one meaning. Never reuse a retired number
☐ Retire by deactivating, never by deleting, so prior-year comparatives survive
☐ Every account has a written definition of what belongs in it. Ambiguity is what produces miscoded entries
☐ No account exists that nobody can define
3. Fund structure, before any account
3.1 Why this is not a stylistic preference
Operating and reserve money answer to different people. Operating money is the membership's to spend this year. Reserve money is being held against a future obligation the current members will not all be present for. Mixing them makes the reserve balance an opinion.
Separate funds also make the two questions a board actually gets asked answerable in one look: are we within budget this year, and is the reserve where the study says it should be.
☐ Operating fund defined
☐ Reserve fund defined
☐ Any additional restricted fund defined, with what restricts it and who imposed the restriction
☐ Interfund receivable and payable accounts exist, so a transfer is recorded rather than assumed
3.2 What each fund holds
| Fund | Holds | Does not hold |
|---|---|---|
| Operating | Assessments for the year's expenses, operating cash, payables, this year's revenue and expense | Anything set aside for a future replacement |
| Reserve | Reserve assessments, reserve cash and investments, reserve component balances, reserve expenditures | Routine maintenance, however large |
| Restricted | Money whose use is constrained by a source outside the board: insurance proceeds, settlements, grants, special assessments raised for a named purpose | Anything the board could redirect at will |
Builder note. The line between a reserve expenditure and a large repair is where most disputes start. Decide it once, in writing, using the reserve study's component list as the test: if the component is on the schedule, its replacement is a reserve expenditure. If it is not, it is maintenance, whatever it costs.
3.3 Basis of accounting
☐ Basis chosen and stated on every financial statement: ☐ Accrual ☐ Modified accrual ☐ Cash
☐ If not accrual, the board understands that assessments receivable and prepaid assessments will not appear as they do below
☐ The basis matches what any required annual report expects (see Part 0)
Accrual is the right default for an association of any size, because assessments are billed in advance and receivables are the association's largest asset after cash.
3.4 Reserve funding convention, choose one and only one
How the operating-side reserve contribution reaches the reserve fund. Pick one, write it down, and never alternate between them.
| Convention | How it records | Consequence |
|---|---|---|
| Transfer | Operating expense account 8010, matched by reserve fund revenue 9010 | Reserve contribution appears as an operating expense, so budget-to-actual includes it |
| Direct allocation | Assessment revenue split at billing between operating 4010 and reserve 9020 | Reserve contribution never touches operating, so the operating statement shows only operating money |
Both are defensible. Alternating between them is not: the two produce different operating expense totals from identical facts, and a year-over-year comparison silently breaks.
4. Assets, 1000 to 1999
4.1 Operating cash, 1000 to 1099
| Account | Name | Fund | Notes |
|---|---|---|---|
| 1010 | Operating checking, [bank name] [last 4] | Operating | Primary disbursement account |
| 1020 | Operating money market, [bank name] [last 4] | Operating | |
| 1030 | Payroll checking, [bank name] [last 4] | Operating | Only if you have employees |
| 1040 | Petty cash | Operating | Fixed imprest amount, [$ amount] |
| 1050 | Undeposited funds | Operating | Should clear within days, never carry a month end balance |
4.2 Reserve cash and investments, 1100 to 1199
| Account | Name | Fund | Notes |
|---|---|---|---|
| 1110 | Reserve checking, [bank name] [last 4] | Reserve | |
| 1120 | Reserve money market, [bank name] [last 4] | Reserve | |
| 1130 | Reserve certificates of deposit | Reserve | One per instrument if laddered |
| 1140 | Reserve investments, other | Reserve | Only what the governing documents and state law permit |
| 1150 | Accrued interest receivable, reserve | Reserve | Accrual basis only |
☐ Every reserve account is titled in the association's name
☐ No reserve account is used for an operating disbursement, ever
☐ Signatories reviewed at least annually
4.3 Receivables, 1200 to 1299
| Account | Name | Fund | Notes |
|---|---|---|---|
| 1210 | Assessments receivable | Operating | Current member assessments billed and unpaid |
| 1220 | Special assessments receivable | Operating or Restricted | Follow the fund the special assessment was raised into |
| 1230 | Late fees receivable | Operating | Separate from principal, see Part 0 |
| 1240 | Interest receivable, delinquent accounts | Operating | Separate from principal |
| 1250 | Legal and collection costs receivable | Operating | Recoverable costs advanced on a delinquent account |
| 1260 | Other receivables | Operating | Insurance claims, vendor credits, owner chargebacks |
| 1290 | Allowance for doubtful accounts | Operating | Contra account, carried as a negative |
Builder note. Splitting principal, late fees, interest, and costs into separate receivables is not bookkeeping fussiness. Where state law fixes the order in which a payment is applied, a single blended receivable makes it impossible to show you applied it correctly, which is exactly the question raised when a delinquency becomes a dispute.
4.4 Prepaid expenses and deposits, 1400 to 1599
| Account | Name | Fund | Notes |
|---|---|---|---|
| 1410 | Prepaid insurance | Operating | Amortise monthly across the policy term |
| 1420 | Prepaid contracts and services | Operating | |
| 1430 | Prepaid licences and permits | Operating | |
| 1510 | Utility deposits | Operating | |
| 1520 | Other deposits | Operating | |
4.5 Interfund and fixed assets, 1600 to 1699
| Account | Name | Fund | Notes |
|---|---|---|---|
| 1610 | Due from reserve fund | Operating | Must always equal 2610 |
| 1620 | Due from operating fund | Reserve | Must always equal 2620 |
| 1650 | Property and equipment | Operating | Only assets the association owns outright |
| 1660 | Accumulated depreciation | Operating | Contra account |
☐ Interfund accounts net to zero on every consolidated statement. If they do not, a transfer was recorded on one side only
5. Liabilities, 2000 to 2999
| Account | Name | Fund | Notes |
|---|---|---|---|
| 2010 | Accounts payable | Operating | |
| 2020 | Accrued expenses | Operating | |
| 2030 | Accrued payroll and taxes | Operating | Only if you have employees |
| 2040 | Prepaid assessments | Operating | Money received for a future period, a liability until earned |
| 2050 | Owner deposits held | Operating | Move-in, key, amenity deposits refundable to the owner |
| 2060 | Insurance proceeds held | Restricted | Until applied to the loss |
| 2070 | Deferred revenue, other | Operating | |
| 2110 | Loans payable, current portion | Operating | |
| 2120 | Loans payable, long term | Operating | |
| 2610 | Due to operating fund | Reserve | Mirror of 1610 |
| 2620 | Due to reserve fund | Operating | Mirror of 1620 |
6. Fund balances, 3000 to 3999
| Account | Name | Fund | Notes |
|---|---|---|---|
| 3010 | Operating fund balance | Operating | |
| 3020 | Reserve fund balance | Reserve | Total, agreeing to the component detail in section 9 |
| 3030 | Restricted fund balance | Restricted | One per restriction if more than one exists |
| 3090 | Prior period adjustment | As applicable | Used rarely and explained in the notes every time |
7. Revenue, 4000 to 4999
| Account | Name | Fund | Notes |
|---|---|---|---|
| 4010 | Member assessments, operating | Operating | |
| 4020 | Member assessments, reserve | Reserve | Direct allocation convention only, see 3.4 |
| 4030 | Special assessments | Operating or Restricted | Follow the purpose it was raised for |
| 4110 | Late fees | Operating | |
| 4120 | Interest on delinquent accounts | Operating | |
| 4130 | Collection cost recoveries | Operating | |
| 4210 | Transfer and estoppel fees | Operating | Where the state permits a charge |
| 4220 | Amenity and facility fees | Operating | Clubhouse, pool key, boat slip, parking |
| 4230 | Rental and lease income | Operating | Cell tower, laundry, commercial space |
| 4310 | Interest income, operating | Operating | |
| 4320 | Interest income, reserve | Reserve | Stays in the reserve fund |
| 4410 | Insurance proceeds | Restricted | |
| 4420 | Legal settlements | Restricted | |
| 4900 | Other income | Operating | If this account is material, it needs splitting |
8. Expenses, 5000 to 7299
Abbreviated to the account groups. Add the individual accounts your budget actually uses, and no others.
8.1 Administrative, professional and payroll, 5000 to 5599
Management fee, administrative and office, postage and printing, website and software, bank and merchant fees, legal, audit and accounting, tax preparation, reserve study, engineering and consulting, salaries and wages, payroll taxes, employee benefits, workers compensation.
8.2 Insurance, 5600 to 5699
Property, general liability, directors and officers, umbrella, flood, equipment breakdown, crime and fidelity, other lines.
8.3 Utilities, 6000 to 6299
Electricity, water and sewer, gas, trash and recycling, internet and telephone, irrigation water where separately metered.
8.4 Grounds and landscape, 6300 to 6599
Landscape contract, tree work, irrigation repair, pest control, fertilisation, seasonal colour, storm cleanup.
8.5 Buildings and common areas, 6600 to 6899
Janitorial, general repairs, elevator, HVAC, plumbing, electrical, roof repair (not replacement), painting (touch-up, not cyclical), pool and spa service, supplies.
8.6 Security and access control, 6900 to 6999
Guard service, patrol, monitoring, gate and access system maintenance, camera system.
8.7 Amenities and recreation, 7000 to 7199
Clubhouse operations, fitness equipment service, recreation programming, community events.
8.8 Contingency and non-recurring, 7200 to 7299
Board contingency, uncollectible assessments written off, non-recurring items with a written explanation each time.
8.9 Reserve funding, operating side, 8000 to 8099
| Account | Name | Fund | Notes |
|---|---|---|---|
| 8010 | Transfer to reserve fund | Operating | Transfer convention only, see 3.4 |
☐ No cyclical replacement is coded to an operating expense account
☐ No reserve expenditure is coded to an operating repair account
9. Reserve fund activity and components, 9000 to 9999
The reserve component accounts are where the ledger meets the reserve study. Number them to match the study's component list so the two can be reconciled without a spreadsheet in between.
| Account | Name | Notes |
|---|---|---|
| 9010 | Transfer in from operating | Transfer convention, mirrors 8010 |
| 9020 | Reserve assessments | Direct allocation convention, mirrors 4020 |
| 9030 | Interest earned, reserve | |
| 9040 | Special assessment to reserve | |
| 9100 to 9799 | Reserve components, one account per component | Numbered to match the reserve study |
| 9900 | Reserve expenditures, unallocated | Should be empty at year end, everything belongs to a component |
Component accounts. One per component on the reserve study, carrying its own balance if the association funds by component. If the association pools, the components still exist as tracking accounts even though the balance is held at the pool level, because a pooled fund still has to answer what it was accumulated for.
☐ Every component account maps to a line on the current reserve study
☐ Every reserve study line maps to a component account
☐ Component balances sum to 3020
☐ 9900 is empty at year end
10. Before you go live
☐ Every account has a written definition
☐ The budget maps line for line to accounts in this chart
☐ The prior year's balances are crosswalked to the new numbers, and the crosswalk is retained
☐ Interfund accounts net to zero
☐ Reserve component accounts reconcile to the reserve study
☐ The accountant who prepares the annual report has reviewed the chart before the year starts
☐ The chart is filed in the official records with the date the board adopted it
Disclaimer
This is a starting point, not legal, accounting, or tax advice, and it is deliberately not state specific. It reflects ordinary association accounting practice and does not state the law of any state.
Requirements differ substantially between states, including whether reserves must be separately accounted for, what annual financial report is owed to members and at what threshold, whether an audit or review is required, and the order in which a payment must be applied against a delinquent account. Do not treat the absence of a requirement here as evidence that your state does not impose one.
Your association's declaration, bylaws, and articles govern and may be stricter than the statute. Have the association's CPA review this chart against your state's reporting requirements, and the association's attorney review the receivable structure against your state's payment-application rules, before the board adopts it. Common Elements is not a CPA firm and does not practice law or accountancy, and using this chart creates no accountant-client or attorney-client relationship.