1 Bank Reconciliation: Start with the Bank, But Don’t Stop There

Bank reconciliation is obviously important. The bank balance in the accounting system should agree with the actual bank statement.

But a reconciled bank account doesn’t automatically mean the accounts are correct.

• An invoice can be paid perfectly and still be coded to the wrong expense account.
• Money can be sitting in the correct bank account but allocated to the wrong fund.
• A transaction can reconcile while still being treated incorrectly for GST.

2 Look at the Expenses as if You Were an Owner

One simple approach is to forget about accounting for a moment and read the income and expenditure statement like an owner would.

Ask: Does this make sense?

• If cleaning was normally $15,000 and suddenly became $27,000, find out why.
• If there has been regular lift maintenance but very little expense recorded against the lift account, check where those invoices have gone.
• If a repair looks unusually large, check whether it should have been treated differently or allocated to another fund.

Compare the current year with the previous year and, where appropriate, with the budget.

Large movements don’t necessarily mean something is wrong. They simply deserve an explanation.

3 Review Invoice Coding

This is one of the easiest places for small mistakes to hide.

Strata businesses process large volumes of supplier invoices. When people are working quickly, coding can sometimes follow habit rather than the actual nature of the expense.

The supplier tells you who did the work.
The invoice tells you what the money was actually spent on.

That distinction matters.

At year-end, review significant invoices, unusual accounts and suppliers whose expenses appear across multiple categories.

Also look for transactions that may have been allocated incorrectly between the Administrative Fund and Capital Works/Sinking Fund.

4 Check Outstanding Creditors

A creditor report shouldn’t just be accepted because the total looks reasonable.

Look at what is actually sitting there.

• Are there invoices that have remained unpaid for an unusually long time?
• Are there credit notes that haven’t been applied?
• Are there duplicate invoices?
• Are there old balances relating to suppliers who haven’t dealt with the scheme for months?
• Does the creditor balance in the balance sheet reconcile with the actual outstanding invoices?

Old creditor balances are much easier to investigate now than two years later when nobody remembers what happened.

5 Don’t Forget Outstanding Levies

Year-end is also a good time to understand the levy position of the scheme.

• How much is outstanding?
• How old are the arrears?
• Are payment arrangements being followed?
• Are there credits sitting against lots that need investigation?
• Are levy receipts allocated correctly?

The arrears figure isn’t merely an accounting number. It affects the scheme’s cash flow and its ability to meet upcoming obligations.

6 Review GST Before the Accountant

GST errors can quietly accumulate through incorrectly coded invoices, incorrect tax treatment or adjustments made during the year.

Before finalising the accounts, check whether GST control accounts reconcile with lodged BAS information and investigate unusual balances.

It is far better to identify a discrepancy during the review than after financial statements have been prepared.

7 Look Carefully at the Balance Sheet

The income and expenditure statement usually gets most of the attention.

But some of the most interesting year-end issues are hiding on the balance sheet.

Review each material balance and ask this simple question.

• Bank accounts should reconcile.
• Creditors should reconcile to outstanding invoices.
• Receivables should reconcile to amounts actually owed.
• GST balances should be explainable.
• Loans, deposits, prepaid expenses and other assets or liabilities should have supporting information.
• Old miscellaneous balances shouldn’t simply remain because “they were there last year.”

8 Check the Funds

Strata accounting isn’t simply about whether the scheme has enough money overall.

Where the money sits matters.

• Review the Administrative Fund and Capital Works/Sinking Fund separately.
• Check whether expenses have been allocated appropriately.
• Ensure transfers between funds are properly authorised, documented and reflected in the accounts.
• Compare the Capital Works Fund position with upcoming planned expenditure.

9 Ask What Next Year Looks Like

A good year-end review shouldn’t only explain the year that has finished.

It should help prepare for the year that’s coming.

• Are insurance premiums increasing?
• Are major contracts due for renewal?
• Is significant maintenance expected?
• Are utility costs trending upward?
• Is the Capital Works Fund adequately prepared for planned projects?
• Does the levy budget still reflect the real cost of running the property?

This is where accounting becomes more useful than simply recording transactions.