How do we set up a process for approving and paying HOA bills?

By OurHOA · General information · Revised October 31, 2026

How an HOA board approves and pays bills: a payment approval form, dollar limits, budget coding, W-9s, a twice-monthly pay run and the records TX, FL and CO expect.

Part of the HOA board handbook: treasurer and money.

Every bill follows the same path

Write down one path and send every bill down it. Someone receives the invoice or asks to buy something. A second person confirms the work or goods arrived and match what was agreed. Whoever has authority for that amount approves it. The treasurer codes it to a budget line, pays it on a set day, and files the invoice and the approval together. A one-page payment approval form, or check request, rides with each invoice the whole way. Small boards skip this because there are only fifteen bills a month. That is exactly when one person can approve, pay and file a bill that nobody else ever sees. Spending authority comes mostly from your bylaws and board resolutions. State law adds bid, conflict of interest and record rules, covered below. Rules vary by state and by each community's governing documents, so treat this as education, not legal advice, and have the association's attorney review the policy before you adopt it.

Set approval limits by dollar amount

Pick limits that fit your budget and put them in a resolution. A version a 60 to 120 home association can adapt: Recurring bills at the price in a board-approved contract, such as landscaping, pool service and trash, plus utilities: the treasurer pays them. Other budgeted spending up to $1,000: any one officer approves. Budgeted spending from $1,000 to $5,000, and any unbudgeted spending up to $5,000: two officers approve in writing before the work starts. Anything over $5,000, any new contract, and any payment to a director, officer or their relative: a board vote at a properly noticed meeting, recorded in the minutes. Emergencies: the president may approve up to a set cap to stop damage or a hazard, and the board ratifies it at the next meeting. Check your state's bid rules when you set the top limit. Florida section 720.3055(1) requires written contracts, and competitive bids when a contract requires payment above 10 percent of the total annual budget including reserves. An 80-home association with a $160,000 budget hits that line at $16,000. Section 720.3055(2)(a)1 exempts employees and professionals such as attorneys, accountants, engineers and managers. Texas section 209.0052(c) requires an association contracting for services that will cost more than $50,000 to solicit bids or proposals through a bid process the association sets up. In Colorado, look to your bylaws and any purchasing policy the board has adopted. One rule closes the most common gap: two invoices from the same vendor for the same job count as one job. Splitting a $7,000 repair into two $3,500 bills to dodge a board vote is easy for a reviewer to spot and hard to explain.

Payments that involve a director

Send any payment to a director, an officer, a relative of either, or a company one of them owns to the full board, however small. Texas section 209.0052(b) lets an association contract with a current board member, a relative within the third degree, or a company in which either holds at least 51 percent of the profits only if there are at least two other bids where reasonably available, the board member does not see them, discuss the contract or vote, the facts are disclosed, a majority of the disinterested board members approve, and the board certifies all of this by resolution. Colorado section 38-33.3-310.5 applies the nonprofit corporation conflict of interest rules in section 7-128-501 to board members, and extends the term officer to anyone the board delegates duties to, including a managing agent, attorney or accountant. A director's own expense reimbursement counts too, so someone else approves it.

What goes on the payment approval form

Keep it to one page. These lines cover nearly every bill: Payee and remit-to address, as in the vendor file. Invoice number, invoice date and amount. What was bought, and for which lot, building or amenity. Authority: the contract, purchase order or board motion it falls under, with the minutes date for anything the board voted on. Budget line or reserve component it is charged to. Work received or inspected by ______ on ______. First payment to this payee? W-9 on file? Yes / No. Conflict check: I know of no director, officer or relative of either with an interest in this payee. Initials ______. Requested by ______. Approved by ______, date ______. Second approver, if over the single-officer limit ______. Paid by check number or ACH reference ______, on ______, by ______. An email approval works if it is saved with the invoice and names the invoice and amount: Approved, invoice 4471, $2,340, reserves, roofing. That is an officer acting under delegated authority, not a board vote. Do not collect a quorum's votes by email unless your state law and bylaws allow action without a meeting. Above the single-officer limit, the approver and the payer should be different people. Treat a new remit-to address or bank account as a red flag until you confirm it by phone at a number already on file. When the bill itself is wrong, our guide on how to dispute a vendor invoice as an HOA board covers short-paying the disputed lines and the letter to send.

Collect a W-9 before the first payment

No W-9, no first check. Form W-9 is how a payee gives the association its taxpayer identification number for information returns. The IRS reporting threshold for payments for services to a nonemployee is $600, or $2,000 for payments made after December 31, 2025, and IRS Publication 15 says the $2,000 figure will be adjusted for inflation for each calendar year after 2026. If a payee fails to give a correct number on a reportable payment, the IRS says the payer may be required to withhold at the current backup withholding rate of 24 percent. Asking in January for a W-9 from a vendor paid in April rarely goes well. Post each payment to a vendor record in the books so year-end totals per payee come straight from the ledger. Our guide on whether an HOA has to send 1099s to vendors covers who gets one. Store W-9s with limited access, since a sole proprietor's form carries a Social Security number.

Pay on a schedule

Pick two pay days a month, such as the 5th and the 20th. Bills approved by the 1st are paid on the 5th, and by the 15th on the 20th. Anything that cannot wait gets paid as an exception, with a note on the form. Pay from the invoice, never from a monthly statement, because statements repeat open invoices which makes it easy to pay the same bill twice. Once paid, write the check number or ACH reference on the form and stamp the invoice paid. Autopay is fine for utilities and fixed-price contracts, but someone should look at each autopay charge on the monthly statement and compare it to the contract price. For electronic payments, use the bank's dual approval so one person enters a payment and another releases it. A sample month: on the 5th, the first batch is paid. By the 10th, last month's statement is reconciled and the payment list goes to the board. On the 20th, the second batch is paid. At the monthly meeting, the board reviews the list.

Keep the records your state expects

File the form, invoice and proof of payment together. That bundle proves a payment was authorized. Florida section 720.303(4)(a)10.a lists accurate, itemized and detailed records of all receipts and expenditures among the official records, and those records must be kept at least 7 years unless the governing documents require longer. Section 720.303(4)(a)9 requires bids to be kept for 1 year. In Texas, section 209.005(m) requires an association of more than 14 lots to adopt and follow a document retention policy that keeps financial books and records for seven years and contracts with a term of one year or more for four years after the term ends. Colorado section 38-33.3-317(1)(a) requires detailed records of receipts and expenditures affecting the operation and administration of the association. Each month, the treasurer sends the board a payment list with date, payee, amount, budget line and approver. Once a quarter, a director who is not a signer picks three payments off the bank statement and pulls their forms. A missing approval means fixing the habit, not just the form.

Wording for the motion

Adapt the numbers: Moved that the board adopt the payment approval procedure presented at this meeting, effective [date]. Under it, the treasurer may pay recurring bills under board-approved contracts at the contract price. One officer may approve other budgeted expenses up to $1,000. Two officers must approve in writing budgeted expenses from $1,000 to $5,000 and unbudgeted expenses up to $5,000. All expenses over $5,000, all new contracts and all payments to directors, officers or their relatives require a board vote. The president may approve emergency spending up to $[amount], subject to ratification at the next board meeting. No first payment will be made to any vendor without a W-9 on file. The treasurer will report all payments to the board monthly.

Mistakes boards make

Letting the treasurer approve and pay the same large bill. Paying from statements and paying twice. Splitting one job into several invoices to stay under a limit. Approving by text and keeping no copy. Leaving autopay running on a contract that was cancelled in the spring. Reimbursing the director who approved their own purchase. Changing a vendor's bank details because an email asked. Pre-signing blank checks so the treasurer can travel. And adopting a policy nobody checks. The quarterly spot check takes ten minutes.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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