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Presenter: San Banerjee. Co-Founder, ApartmentADDA.com
EXPENSE
budget Purchase Request
Purchase Order
Vouch
er
VarianceTDS
Write-Off
Form-16
Petty Cash
INCOME
Refundable Deposit...
Frequently Used Terms in this Workshop
• Society = Association = RWA = AOA = HOA
• Members = Owners. (Tenants are Associat...
When Association is Formed.
Bank Account of Society created
Pre-Formation Contribution
from Members
Corpus Fund from Build...
MC Faced with Structuring Bill.
At What Frequency should the
Maintenance Billing be?
What Structure should the Bill have?
...
Bill Structure Must Consider Below
• What Expenses will the Apartment Complex incur in its
lifetime.
• Based on Sq.Ft. Rat...
Deep Dive into the Maintenance Bill
Mind Map
Myth #1
Association should not keep any Excess Fund at the end of Year.
Any Excess must be refunded to Members.
Reserve Fu...
Myth #2
If the Association keeps FD in a Cooperative Bank, there is no Tax
on the Interest.
Only if the Association and th...
Myth #3
An Owner can 'Choose' to not be a Member of the Association.
Apartment Owners Association is a statutory Body. Eve...
Myth #4
Tenants can not be charged differently from Owners.
Service Charges of an Association will be higher when Flats ar...
Myth #5
The only way to Augment Revenue is Interest from Fixed
Deposits.
Major inherent revenue earning potential of Assoc...
Deep Dive into the Service Tax Issue
Clarity on Service Tax
• Collection of Service Tax to be levied if:
• Association qualifies (Income > Rs.10L/Year) AND
• M...
LACK of Clarity on Service Tax
• Taxable Services?
• When is Association a Pure Agent
Contradictions: Collection for Indiv...
Not Liable in absence of Service
Component
Not Liable as it is
a part of
Exempted
Services
Liable To Service Tax Where not...
Association Accounting - Best Practices
#1 Say No to Cash Collections
#2 Deduct TDS where relevant
#3 One Account for Coll...
Regular Accounting Activities
Daily Monthly Quarterly Yearly
Activity
1. Enter
Maintenance
Bills, Vendor
Invoices.
2. Ente...
Statutory Audit - What happens
• Review Bank Reconciliation
• Review Accounting Journal Entries
• Review Tax Collection, R...
Financial Statements
• To Registrar of Societies
• Balance Sheet
• Income Expense Report
• Asset Register, Member Register...
THANK YOU!
Get an ADDA – India’s #1 Portal for Society Accounting!
www.apartmentadda.com
99876-33345 (San)
@sanban
@apartm...
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
ApartmentADDA's Workshop for Treasurers in Apartment Complexes
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ApartmentADDA's Workshop for Treasurers in Apartment Complexes

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This Presentation is from Workshop for Treasurers conducted by ApartmentADDA in Chennai. It presents ApartmentADDA's learnings from hosting 3000+ Apartment Complexes in India. In particular learning from some of the best maintained Societies in Mumbai. It covers

• Maintenance Bill Structure (Bill Frequency, Sq.Ft. Rate vs. Flat Rate, Bill Heads)
• Service Tax
• 5 Myths in Society Accounting
• Accounting Activities in Society Accounting.

One of the learnings was from Brigade Metropolis- a 1600 apartments community which served as a great case study of Treasurers with no prior knowledge of Accounting or Financial Governance, doing a great job adding Value to their Public Funds, with their Personal Commitment and a Transparent System.

To get more insights check here,
http://apartmentadda.com/blog/blog/2013/10/11/workshop-for-treasurers-2/

Published in: Real Estate
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ApartmentADDA's Workshop for Treasurers in Apartment Complexes

  1. 1. Presenter: San Banerjee. Co-Founder, ApartmentADDA.com
  2. 2. EXPENSE budget Purchase Request Purchase Order Vouch er VarianceTDS Write-Off Form-16 Petty Cash INCOME Refundable Deposits Credit Note Suspense Service Tax Defaulters Income Tax BANK RECONCILIATION Book Balance Bank Balance Reconciled UnReconciled Credit BALANCE SHEET General LEDGER Income Deb it Assets Service Tax Trial Balance Journal Entrie Liabilities Goals of Workshop: 1. Simplifying Society Accounting 2. Sharing known Standards 3. Sharing of Best Practices by Treasurers
  3. 3. Frequently Used Terms in this Workshop • Society = Association = RWA = AOA = HOA • Members = Owners. (Tenants are Associate Members) • MC = Management Committee • GB = General Body = All Members • Treasurer = Person End Responsible for the Society Accounts • Non-Members = Advertisers/External Payers
  4. 4. When Association is Formed. Bank Account of Society created Pre-Formation Contribution from Members Corpus Fund from Builder
  5. 5. MC Faced with Structuring Bill. At What Frequency should the Maintenance Billing be? What Structure should the Bill have? How to map Expenses to the Collections? Sq.Ft. Rate or Flat Rate?
  6. 6. Bill Structure Must Consider Below • What Expenses will the Apartment Complex incur in its lifetime. • Based on Sq.Ft. Rate or Flat Rate • Representation of Collection Heads to insulate against Taxation vagaries.
  7. 7. Deep Dive into the Maintenance Bill Mind Map
  8. 8. Myth #1 Association should not keep any Excess Fund at the end of Year. Any Excess must be refunded to Members. Reserve Funds are a Must for the Association. Mutuality Principle protects against Income Tax. Reality
  9. 9. Myth #2 If the Association keeps FD in a Cooperative Bank, there is no Tax on the Interest. Only if the Association and the Cooperative Bank are part of a common Association! Reality
  10. 10. Myth #3 An Owner can 'Choose' to not be a Member of the Association. Apartment Owners Association is a statutory Body. Every Owner Member by Default. Must also be part of Sale Deed. Reality
  11. 11. Myth #4 Tenants can not be charged differently from Owners. Service Charges of an Association will be higher when Flats are occupied by Tenants instead of Owners. Reality
  12. 12. Myth #5 The only way to Augment Revenue is Interest from Fixed Deposits. Major inherent revenue earning potential of Associations. Reality
  13. 13. Deep Dive into the Service Tax Issue
  14. 14. Clarity on Service Tax • Collection of Service Tax to be levied if: • Association qualifies (Income > Rs.10L/Year) AND • Member qualifies (Collection>Rs.5000/Mo) • If Collection > Rs.5000/Mo, FULL Collection Amount of the Member is Service Taxable. • Service Tax applicable only to Specific Members who qualify not to all members.
  15. 15. LACK of Clarity on Service Tax • Taxable Services? • When is Association a Pure Agent Contradictions: Collection for Individual Electricity Bill, vs. Collection for Property Tax.
  16. 16. Not Liable in absence of Service Component Not Liable as it is a part of Exempted Services Liable To Service Tax Where not all transactions are liable Property Tax Water Charges Service Charges Renting of Hall Repairs & Maintenance Fund Solid Waste Management Parking Charges Renting for Religious Function Major Repairs & Maintenance Fund Insurance Charges Non-Occupancy Charges Renting of Room Sinking Fund Electricity Expenses Transfer Fees Sponsorship/Advt Interest Cultural Expenses Hoardings/Tower Penalty Parking Charges Non-Agriculture Tax Entrance fees Education & Training Fund Club house Election Fund Taxable Services (courtesy: ApartmentADDA partners dalalca.com)
  17. 17. Association Accounting - Best Practices #1 Say No to Cash Collections #2 Deduct TDS where relevant #3 One Account for Collection, Multiple to Hold Funds #4 Perform Bank Reconciliation Regularly #5 Obtain Audit Supervision as early as possible
  18. 18. Regular Accounting Activities Daily Monthly Quarterly Yearly Activity 1. Enter Maintenance Bills, Vendor Invoices. 2. Enter Cheques Collected & Paid. 1. Bank Reconciliation 2. Cash Reconciliation 3. Pay TDS 4. Pay Service Tax 1. File TDS Return 2. File Service Tax Return (Half Yearly) 1. Audit 2. Adjustment Entries 3. IT Return Filing 4. RoS Filing Person Involved Data Entry/Accountan t Data Entry/Account ant + Treasurer Data Entry/Accou ntant Data Entry/Accountan t + Treasurer+ Auditor
  19. 19. Statutory Audit - What happens • Review Bank Reconciliation • Review Accounting Journal Entries • Review Tax Collection, Remittance & Filing • Post Asset Depreciation • Post Accrued Interest from Bank FDs. • Post Provisions and other Adjustment Entries
  20. 20. Financial Statements • To Registrar of Societies • Balance Sheet • Income Expense Report • Asset Register, Member Register, Office Bearers Register, Bye-Laws • To Members • Account Statement of the Flat • Members who are in Default • Members who have paid in Advance • Vendors who are yet to be Paid
  21. 21. THANK YOU! Get an ADDA – India’s #1 Portal for Society Accounting! www.apartmentadda.com 99876-33345 (San) @sanban @apartmentadda

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