Association management companies can bring a high level of financial expertise to an organization at a reasonable cost.

A small association might have only a single unsupervised bookkeeper on staff. Association management companies have accountants and a manager or even a controller/CPA supervising the workflow. The cost of the financial function is shared among multiple clients, providing excellent value for each association.

An association should have an annual independent audit. The audit provides verification to the association leader and members that financial integrity is a priority. However, the cost of an audit can be quite high. The following conditions generally raise the cost of an audit:

• Lack of competent financial management
• Lack of financial operating procedures in written form
• Sloppy record-keeping, which requires the auditor to make adjustments at year-end
• Poor segregation of financial duties within the organization because of limited financial personnel
• Turnover of financial staff

A management company with a competent financial staff can address all of the issues that can add unnecessary cost to the audit:

• Bookkeepers are well trained and supervised to ensure that transactions are based on generally accepted accounting principles (GAAP) and clean sets of records are available to audit.
• Budgets are completed, on time, with a clear line of sight to business strategies.
• Management-level financial personnel supervise staff, thus ensuring the records are accurate and that issues are properly addressed in the financial statements.
• Reports are available, on time, to the Executive Committee or the Board to guide decision-making.
• Written operating procedures ensure consistent accounting methodology.
• Staff turnover in a well-trained and organized finance department is handled without disruption.

Association management companies provide these benefits to a client at a reasonable cost, often less than what is paid by associations with staff employees. In addition, they work with investment firms to monitor the association’s investment portfolio and maximize returns.