How do we hire a bookkeeper or accounting service for our HOA?

By OurHOA · General information · Revised September 26, 2026

How an HOA board hires a bookkeeper: the monthly scope, what the board keeps, contractor rules and 1099s, state license and bond rules, and the contract terms.

Part of the HOA board handbook: treasurer and money.

The short answer

Write down the monthly job before you talk to anyone, then get written proposals from two or three bookkeepers or accounting firms that already keep books for community associations. The bookkeeper records, reconciles and reports. The board keeps the power to approve and release payments, stays in control of the bank, and gets the statements directly. Collect a W-9, check your state's license and bond rules, and sign a contract that says the books belong to the association. Rules differ by state and by your governing documents, so treat this as general education, not legal or tax advice.

Write down the job first

Most bad bookkeeping arrangements start with a vague handshake: "help the treasurer with the books." Put the job on one page instead, split into what happens every month and what happens once a year. Monthly: 1. Post owner payments to each owner's account and post late fees the board has adopted. 2. Enter vendor bills the board or treasurer has approved, and queue them for payment. 3. Reconcile every bank account, operating and reserve, to the statement. 4. Send the treasurer a package by a set day, say the 15th: balance sheet, income and expense against budget, the delinquency list, and the reconciliations with the statements attached. Yearly: 1. Collect W-9s during the year and prepare the 1099-NEC forms in January. 2. Close the year and hand the CPA the year-end package. Then list what is out of scope, such as collections letters, resale certificates, owner phone calls and payroll. Anything not on the page will either get missed or show up as an extra charge.

Keep the money decisions with the board

A bookkeeper should never be the only person who can move money and also the only person who sees where it went. Set it up so no single person can do both. - The bookkeeper is not a signer on any account. Give them view-only online banking, or a role that can enter payments but not release them. - A director, usually the treasurer, approves each bill and releases each payment. With two or more people involved, use the bank's dual control setting. - Owner payments go to a bank lockbox or online payment account in the association's name, never to the bookkeeper's own business account. - A second director who is not the treasurer gets the bank statements straight from the bank each month and compares them with the reconciliation. - The association owns the accounting software subscription and adds the bookkeeper as a user, so the board can remove access in one click. Our guide on protecting HOA bank accounts from fraud covers the bank settings in more detail. The controls protect the bookkeeper too, since a clean trail shows who did what.

Contractor or employee, and the tax paperwork

Most small associations hire a bookkeeper as an independent contractor. The label in the contract does not decide it. The IRS looks at behavioral control, financial control and the type of relationship, and says no single factor settles the question. A bookkeeper with other clients, their own software and a flat monthly invoice looks like a contractor. Someone the board schedules and supervises in the clubhouse office every Tuesday may be an employee. If you cannot tell, Form SS-8 asks the IRS to decide, though the IRS says that takes at least six months. Our guide on whether an HOA can have employees covers what changes when you hire one. For a contractor, get a signed Form W-9 before the first payment. For payments made in 2026 and later, the IRS instructions for Form 1099-NEC set the reporting threshold at $2,000, up from $600, with inflation adjustments possible from 2027. Payments to a corporation are generally exempt, but check the W-9, since many one-person bookkeeping businesses are sole proprietors or LLCs that do get a form. Our guide on HOA 1099s walks through the filing.

State rules to check before you sign

Florida is the state where this goes wrong most often. Section 468.431(2) defines community association management to include controlling or disbursing association funds, preparing budgets or other financial documents, determining amounts owners owe, and collecting those amounts before a lawsuit. It applies when the work is paid and the association has more than 10 units or a budget over $100,000. Section 468.432(1) requires a license to do that work, but it does not stop someone licensed under another law, such as a CPA, from practicing their own profession. So in Florida, hire a CPA firm, a licensed community association manager or management firm, or a bookkeeper who works under a licensed manager's supervision, and ask each candidate which one they are. Section 720.3055 also requires every service contract to be in writing, and section 720.3033(5) requires the association to carry insurance or a fidelity bond for everyone who controls or disburses its funds, unless a majority of the voting interests present at a properly called meeting waives it each year. Colorado: for an association with 30 or more units, section 38-33.3-313(10) requires fidelity insurance, where reasonably available, if any owner or employee controls or disburses funds, in an amount of at least two months' assessments plus reserves. Section 38-33.3-313(11) requires an independent contractor hired to manage the community to carry the same amount unless the association's policy names them as an insured employee. Section 38-33.3-306(3)(a) says that if the board delegates collection, deposit or disbursement of funds to someone else, the bylaws must require that person to carry fidelity coverage of at least $50,000, keep the association's accounts separate from other clients' accounts, and keep reserves separate from operating funds. Texas Property Code chapter 209 has no licensing rule for bookkeepers. Section 209.0052(b) does apply if the candidate is a director, a director's relative within the third degree, or a company either one controls: you need at least two other bids if reasonably available, and the interested director stays out of the discussion and the vote. Section 209.0052(c) requires a bid process only for service contracts over $50,000, which a small association's bookkeeping will not reach.

Proposals and the questions that sort candidates

Send each candidate the same short packet: number of homes, annual budget, number of bank accounts, how owners pay today, the software you use now, your fiscal year end, and the one-page scope. Ask for a fixed monthly fee, the hourly rate for work outside the scope, and what the fee assumes, such as bills per month. Then ask each one: - How many community associations do you keep books for now, and can we call two of their treasurers? - Do you track each owner's balance, or only the association's accounts? - What day of the month will we get the package, and what happens when you miss it? - Who does the work when you are sick or on vacation? - What insurance do you carry: fidelity or crime coverage, and professional liability? - If we end the contract, what do we get back, in what format, and how fast? Call the references and ask how often the package arrived late and whether the year-end review found errors. A cheap bookkeeper who leaves the CPA a mess costs the difference back at year end.

Contract terms that protect the association

Whatever form the contract takes, make sure it says: - The books, the accounting file and every document the bookkeeper receives belong to the association. - The bookkeeper returns everything, including an export of the full general ledger and owner ledgers in a standard format, within a set number of days after the contract ends. Fourteen days is a reasonable ask. - Either side can end it on 30 days' written notice without cause. - The bookkeeper keeps owner information confidential and uses it only for this work. - The bookkeeper carries the insurance you asked about, and names the association where the policy allows. The contract should also match your records duties. Texas section 209.005(m) requires the board to adopt a retention policy keeping financial books and records and tax returns for seven years and current owners' account records for five. Florida section 720.303(4)(a)10 makes the financial and accounting records, including each member's account statement, official records that must be kept at least seven years, and owners can ask to inspect them. Never let the bookkeeper hold the only copy.

The vote and the first three months

Approve the contract at an open board meeting. A motion the secretary can copy: "Motion to engage [name or firm] to provide bookkeeping services under the attached scope for a fixed fee of $[amount] per month, beginning [date], with the treasurer to approve and release all payments and [second director] to receive the monthly bank statements directly; and to authorize the president to sign the contract." A sample start-up schedule: - Month one: the treasurer hands over the prior year's reconciliations, the current owner ledger, open bills and the budget. The bookkeeper sets up or takes over the accounting file. The board confirms the fidelity coverage lists the bookkeeper or that the bookkeeper's own policy is in place. - Month two: the first full package arrives. The treasurer checks each reconciliation against the bank statement and spot-checks ten owner balances. - Month three: the board reviews the package at its meeting and lists anything that needs fixing. If the owner ledger and the bank balance still do not tie out after three months, that is the bookkeeper's problem to solve before the arrangement continues. Three mistakes come up again and again: making the bookkeeper a signer to save a trip to the bank, the board no longer reading the package because someone is paid to prepare it, and letting a former treasurer or a director's friend keep the books without the scope, contract and controls you would ask of a stranger.

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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