Strata operations: Easy Accounting for Self-Managed Stratas

0:00 – Self-Managed Stratas and StrataCount Overview

0:00 Wendy Wall: My name is Wendy Wall, I'm the president of the Vancouver Island Strata Owners Association, and today we're going to talk about, accounting does not have to be complicated for a strata corporation. So, easy accounting for self-managed stratas. And the reason we've titled this self-managed is, you may not realize that almost 80 percent of the stratas in our province are under 25 units, and a lot of the stratas of that size, including mine, are self-managed, sometimes by choice or sometimes because it's difficult to find a management company, sometimes for smaller stratas.

0:37 So just an introduction to us if you're just joining: VISOA is a non-profit society that has been providing education and support to strata owners for over 50 years, and we also are a voice to speak for you, to advocate on certain matters. And so today we're going to talk about accounting. So, as I said, accounting for stratas does not have to be complicated. In 2014 one of our board members, who's just a brilliant man, he designed what we call StrataCount.

1:11 It's an easy Excel accounting package, very easy to use, you don't have to have bookkeeping experience or accountant experience. It will produce the financial reports that you need to comply with the Strata Property Act. And I think this is one of the things to remember, is the requirements in the Act and the regulations are actually quite simple. They're not what I would call the full scale of what an accountant would produce, but the point is you don't have to, because the Act doesn't require that.

1:46 And so what we often find is that, as you know, it's sometimes hard to get people to step up and volunteer to be a council member, and sometimes nobody wants to be treasurer. So sometimes the person who's left sort of stuck being treasurer has no experience and they don't really know where to start, and they need something to help them along. So I'm just going to get out of there for a second and come to my Excel sheet.

2:18 So hopefully everyone can see an Excel sheet now, Ryan?

2:22 Ryan Grant: Okay, great, great. Maybe try and zoom in a little bit on it.

2:28 Wendy Wall: I will when I get to the pages, but basically we did a complete overhaul after 10 years of learning from people what they liked or didn't like about this program. We did a complete overhaul in 2024, so I'm really excited to show it to you. And of course I opened the one for special levy by mistake, let me open the right one.

2:48 – Budget Page Walkthrough

2:51 Wendy Wall: Okay, so I've tried to zoom in, is it a bit bigger now Ryan?

2:57 Ryan Grant: It could be a little more bigger.

3:01 Wendy Wall: A little more. Okay, I know it's really hard when you're looking at someone's screen and they're flitting about. But the first page on StrataCount is really your budget. You're already creating a budget, here you just have to enter it. So in this case, on the right hand side, you're going to see the months of the year. In this example their fiscal year starts on November 1st and it ends on October 31st, so I've just put the months in in the right order.

3:27 And then on the left, anything that's a yellow box is for you to enter information, everything else is locked so that you don't mess up the formulas. So you're going to enter in your strata fees, you're going to enter in all of the expenses that you already budget, and then I'm just going to scroll down, I know that's annoying. At the end it's going to tell you what your operating expenses are, it's going to give you a place to put in your contribution to the contingency reserve fund, and then it's going to tell you, have you budgeted a deficit or surplus.

4:04 You can go back and forth and try to get your budget to be balanced. And sometimes that means increasing the fees a little bit, or lowering them.

4:10 – Fees Page and CRF Breakdown

4:12 Wendy Wall: But I'm just going to scroll back up. So here we've set the strata fees at just over 84,000. If we go to the next tab, it's called the fees page. So when we go to this page, I'm just going to zoom in again. It automatically carries forward the budget that we set on the first page, 84,000. So if we were to change it on the budget page it will automatically change on this page.

4:38 It also tells you how much of that strata fee is going towards operating expenses, how much is going towards the contribution to the CRF. And that's really important, because the regulations require, in your AGM package, to show that breakdown for each owner: how much of their monthly fee goes to operating and how much of their monthly fee goes to CRF. You don't have to worry about any of that, because this sheet will do it for you.

5:11 – Unit Entitlement and Monthly Fee Calculation

5:11 Wendy Wall: So again, all the yellow boxes are boxes where you put the information in. So on the left hand side you're going to see our owners, and I love this strata because everybody's a standup comedian. Then you enter their strata lot number, their unit number and their unit entitlement. And it's the unit entitlement that is the really important thing, and that is filed at the Land Titles office.

5:35 You can't change it, you have to use the formula. And sometimes the unit entitlement adds up to something really round, like a thousand or 10,000, sometimes it's just a number like 693. That's okay, you just enter the unit entitlement, and then this program is going to figure out what the monthly fee is for that owner, how much of it goes to the CRF and how much of it goes to the operating fund.

6:07 And that's all based on what's at the top of the page, which of course is coming from the previous page. So you don't have to change… as soon as you change the budget on the first page it'll recalculate the monthly fees here. So it's really important to start off your year by having your budget entered correctly, because it carries forward with everything else. Now, in this strata they don't have the AGM until two months into the fiscal year, so in November and December they were still paying the old amount of the strata fees.

6:36 So halfway across the page, when we get to these yellow boxes, we've entered what people have actually paid. And then we'll see that owner number one, their fees went up in February, there's sort of an adjustment there, so it was high that month, and then in March and April it's gone down to the approved monthly fee at the AGM. And if people miss payments you just don't enter their amount, because they haven't paid.

7:05 And I'm going to scroll all the way to the right, because it keeps a running balance. It tells you how much that owner would owe for the whole year, and it keeps a running balance of how much they've paid. So it just gives you a snapshot of where each owner is in paying their strata fees. This sheet is standalone, it's really the purpose is to calculate the fees for you, to record the payments from each owner so you can keep track of arrears.

7:36 – Monthly Ledger and Books of Account

7:36 Wendy Wall: But this page doesn't affect other pages very much, it's all on its own. And then at the bottom we've got ledger month one, ledger month two. So basically the first month of our year is November, it knows that the first month is November, and it's giving me a ledger to enter expenses and revenue. So again, the yellow boxes are for you to type in, the white boxes are locked formulas.

8:07 And it's a very simple thing. The Strata Property Act requires you to record money coming in, money going out. And that reason is really important, because under section 35, the documents that owners are required to see include what's called books of account. So for your strata, if you're using this, this is the easiest way to satisfy that part of the Act that's called books of account, because you can just print off this section, and it's going to tell the reason for each deposit and each expenditure.

8:47 So you can type in different things. In this case one day someone went to Rona and bought some ice melt. We've set up the type of transaction to have little dropdowns, so it's really easy to pick whether it's a deposit or whether it's a cheque or an e-transfer, you just choose the one that corresponds to this payment. Then the first section of this sheet is about revenue.

9:11 So super simple: strata fees that came in, interest that came in. And in this case in our budget we've created a category called other revenue. In this little strata, pretty much the only other revenue that ever comes in is if there's a unit up for sale and the realtor or the lawyer, they order a Form B or something like that. And then, as I scroll along — it's a very wide spreadsheet, so it's easier to scroll along — when I'm entering my gardener, Sally's Gardening, I just scroll until I get to the column for landscaper and enter the amount.

9:48 And as you can see we've got waste removal, XYZ Waste Removal is there. And as we scroll across we're going to get a column for those total expenses, and we're going to get some other columns to do with the contingency reserve fund. So we'll get to it a little bit later, but you can show a loan from the CRF, which is permitted on a temporary basis. In this case the strata had, their insurance was due, so it's a small strata, to come up with $9,000 to pay that first half of their insurance bill is a big amount in the first month of the fiscal year.

10:29 So over here we're showing a loan from the CRF. And as we go through, every month has its own sheet, and it just keeps going along. And then there's a couple of great tools to give you an idea of what's going on in the year. And I really like this one, it's called the summary sheet. It's not something that's required by the Act, but for council it's a great snapshot of what's going on, and you can really see if any errors have been made.

11:05 So for example, if halfway down I've got this line called landscaper, I can see every month what we've paid the landscaper. And if I noticed one of those months was zero, I could look at it and say, well, did I put it in irrigation by mistake? So it's a really great way to sort of make sure that your entries look right, and you can go back and fix it any time.

11:25 – Income Statement and Year-End Reporting

11:25 Wendy Wall: So unlike a program like Sage accounting or something, where the posting of every transaction is a little more complicated, this is a really easy program because you can fix mistakes quite easily. And then we come to the income statement. And I know it's really small, I just want to show you that it all fits on an 8 and a half by 11 page. But I'm going to zoom in now so you can see what's going on.

11:53 Everything on this page is locked except for one yellow box, and in this yellow box all you do is you type in the month that you want to report for. So I'm going to type in month two, and we can see our budget items the way we entered way at the beginning, and our expenses. And the first column is what happened this month, the second column is what's happened year to date, and then the third column is what the budget is.

12:22 So I'm going to go to month six because it's a little more interesting. So we're halfway through the year, we can see that our strata fees, we're at 50 percent, and there will be another 42,000 to collect as we go through the year. For expenses, I can see that we had $750 budgeted for the parking lot expenses. I can see that year to date we've only spent $595, so we've only spent 79 percent of that budget and we've still got $154 left.

12:54 The Strata Property Act doesn't actually require you to do monthly reports at all. However, I, as a council member, don't know how I would help manage our strata if we didn't know where we were at every month. So this is just a really, really easy way of producing your financial report every month. And of course when you get to month 12 you've also produced a report that is your year end.

13:20 And that's all you need to do, is put that one page into your AGM package, and that is your financial report that meets the requirements of the Strata Property Act and the regulation, to show people the financial report for the year ending.

13:33 – Contingency Reserve Fund Tracking

13:39 Wendy Wall: The last thing I'll show you is, we have a page for the contingency reserve fund. And this looks crazy because it's big, but it's not that complicated. Again, on the left, at your AGM you're going to have a very simple budget for your contingency reserve fund, that basically says, here's how much is in it, here's how much next year we expect to contribute, here's the projects that we expect to happen, and what the balance would be expected if all those things happened.

14:14 Now, a CRF budget never works out exactly, but you still have to tell it at the AGM. So on this page you would enter what you told people at the AGM for your budget for the CRF, and then it keeps a running bank balance. So as we go through, we can see that the planned budgeted amount for CRF contributions was 21,000. That is a cell that's taken from that very first budget page and fills it in for you.

14:41 And then as you go through the year you're going to enter your interest earned every month. In this case there was a surplus last year, so once we got to February we had enough cash flow to put last year's surplus into the CRF. And then starting in March and going through to October we'll be putting in 2,600 every month for our CRF contribution, which will add up to 21,000.

15:08 I won't go through it, but this is also a page to keep track of every single CRF project that you have going on. So this little strata, there's a fence repair project, a building envelope assessment, and then some security lights. And as we go through the year we can enter in how much was spent that month on that project. And it's usually only one or two months where you're going to have an expense to show for that project, but at the end, on the far right, it keeps a year-to-date total for that project.

15:39 And there's other lines in here, I won't go into how they use them because it's a short demo, but we have a place here where you can calculate the amount that has to go on your Form B. And then I'll just quickly say that on the Form B it says, well, how much is in the CRF? But it's not the bank balance, it's how much is in the bank and all of your investments minus the amount that's committed to projects.

16:05 So you need to figure out that amount, and this is just a super easy way to do that. There's also a place to record loans. So earlier I said we borrowed 7,000 from the CRF as a temporary loan. Well then I can see in January and February that we repaid 3,500 and 3,500, so now it's telling me that that loan is completely repaid.

16:22 – Where to Buy StrataCount and Support

16:25 Wendy Wall: So I am going to go out of this, Ryan, and just throw up our slide that has the…

16:39 Ryan Grant: Sorry, we can see the slide.

16:39 Wendy Wall: There we go. So this is just a reminder of where to find this if you're interested. It's really great for self-managed stratas. I have been using it for about four years in my 15 unit strata, it works great. I've also used it in my old strata, which was 94 units, and I kind of wanted to test out StrataCount one year, so I just shadowed everything that was from the reports from the property management company.

17:11 And that was just a neat, fun test of how StrataCount works. So if you're interested, StrataCount is available on the current website, and it's in the publications section. And those are all purchases that you get online, and after you pay you can download the files. We'll also give a little bit of support, so there's a huge instruction booklet telling you step by step how to do each section, and there is contact information in there as well if you need a bit of support.

17:44 Okay, so we can stop sharing, Ryan. If we have any time, I know I rattled on quite a bit.

17:50 Ryan Grant: No, it's great, we have some time. I think we have minutes or so for questions. Let me get back so I can see. You definitely got a few questions.

18:05 Wendy Wall: Yeah, and I just want to say quickly, I know that this is not high tech, but sometimes low tech, you know, is all we need, and just keeping it simple and easy to use.

18:16 Ryan Grant: Yeah, I was going to say that as well, that this is a great solution for the self-managed stratas that don't want to be paying and learning how to use other complicated accounting systems, or bring in the accountant and whatnot, and want to try and do it themselves, right? A small strata, a few units or whatever, can easily take this and then run with it.

18:42 Wendy Wall: Yeah, I'd say most small stratas that I talk to, they only have 10 or 15 transactions a month. I think the sheet has enough for 505, but you'd probably never need that many in a small strata.

18:52 – Q&A: Google Sheets and Data Residency

19:00 Ryan Grant: Okay, let's see, I'm just going to copy paste a whole bunch of them there into the chat then. Some of them seem like they're not relevant to this particular webinar, right? So I'll let you just kind of go through and see which one you want.

19:15 Wendy Wall: Sure. Great question about, does StrataCount work for other things? So we don't guarantee that it works perfectly, but I do know of people who have used it in… what's the Apple one? It's not called Excel in Apple, it's called Numbers. So some people have tried it with the Apple product. Google Sheets, I haven't had anybody report a problem with Google Sheets. But what I would say with that is, try it, but just do some manual checks.

19:54 See if those numbers carry forward, does your bank balance carry forward from month two to month three. One really good way of checking is when you go to reconcile your bank balance: if it doesn't reconcile and nothing is outstanding, then something's wrong. But if everything's reconciling, then that's a really good indication that the sheet is doing its job, to match what's actually going on in your strata.

20:25 So we can't guarantee that it works right in those other programs, but to date I haven't had anybody tell me that they had a problem.

20:32 Ryan Grant: Perfect. And then another thing that I thought too, like, my strata was very paranoid about having data in the US, and you use Google Sheets, you don't know which servers, are they using the Canadian servers or US servers? You know, they have global servers, you can't select where they store your data. So that could be another reason.

20:52 Wendy Wall: Now, that said, there's no legal requirement to keep it in Canada, there's no legal requirement to keep it in BC, but I do understand people's concerns.

21:00 – Q&A: Building the AGM Budget Package

21:02 Ryan Grant: Yeah, some of them are paranoid about it, right? Let's see, I guess, yeah, you have the other questions there.

21:12 Wendy Wall: Oh, there's one about showing the budget that would appear in the AGM package. It's exactly the budget I showed at the very first sheet, where you enter in your revenues and expenses. So what some people do is, a couple of months before the AGM when they're planning their AGM, start a brand new file of StrataCount that has nothing entered in it, type in your proposed budget and get it all balancing, check the strata fees to see, are people likely going to approve it.

21:45 That can be your proposed budget that goes into your AGM package. Then once you know whether or not it's approved, if there was an amendment before it was approved at the meeting, you can come back, make sure it matches what was actually approved, and then you're ready to start using it for that fiscal year. If you've already purchased StrataCount, can you get the latest version? Absolutely, send an email to information@visoa.bc.ca.

22:30 – Q&A: Locked Formulas and Fraud Controls

22:30 Wendy Wall: Well, the emphasis is on simple: what controls are in place to prevent content from being altered? Well, there's a mention about fraud. Nothing can prevent fraud other than people, so I'm not going to talk about fraud. But in terms of altered: we've protected all the formulas, and I sometimes get complaints about that, but the point of the formulas is you don't want them to be accidentally altered.

23:00 And in the past people have asked for the password, and I just say, no, sorry. But we don't want to be responsible for errors in your financials because someone has accidentally or intentionally changed a formula. Can you access locked formulas? Again, no. If you have a problem and you need support then contact us, but there's a good reason for keeping those locked. Did I miss one that was on point?

23:35 Oh, there is a good one here, it says, is StrataCount available if you purchase the VISOA publication collection? Yes it is, and I did make sure that the most recent version of StrataCount is in there. Perfect. So, Ryan, are we out of time?

23:53 Ryan Grant: No, we had about five more minutes.

23:56 Wendy Wall: Okay, good.

23:56 Ryan Grant: Okay, yeah, if there's any last questions there, otherwise we can wait for the next presentation to start. Let's see.

24:10 Wendy Wall: Sure. Oh, there is… I'll make one more comment before we get to that question, Ryan, and that is a thank you. We've been using this for 10 years, StrataCount for 10 years, so first of all a thank you to Cleve, who invented it in 2014, but also thank you to any of you who are members or people who have used StrataCount. It's your feedback over the last 10 years that informed us of how to change it and how to give it its overhaul this year, and we're really excited to have implemented a lot of those suggestions.

24:39 – Q&A: Year-End Statements and Simple Financials

24:50 Ryan Grant: Oh, there is… is there a new one?

24:54 Wendy Wall: Yeah. Is there a requirement to show last year's amount and the months from end of year to new year? If you're doing your AGM package you have to show a financial statement, so that's what I showed when I was typing in, and I showed you the six-month mark. Once you get to the 12 month mark, that is your year-end financial report. So absolutely, that is a legal requirement, that year-end financial report must be in your AGM notice package.

25:29 Then you would have your proposed budget, which also has to be in the AGM package. Now, some stratas like to put that all on one, so they'll show a column for what last year budgeted, the actual from last year, and the proposed from the coming year. That's a presentation choice, if you want to do it that way you can, there's no requirement, but the requirement in the Act is the information that I said.

25:56 Whether you present it as two documents or one document is up to you.

26:04 Ryan Grant: Looks like there was one more potentially, but I don't know if that was just in reference to the last one.

26:13 Wendy Wall: Oh, this is a great comment: the strata manager presents a complicated budget with a lot of things and it's unreadable. That is an excellent observation. Management companies use professional accounting software, there's nothing wrong with that, but one of the things with VISOA that we like to remind people is, things don't have to be complicated, they just have to comply with the Act. And there is a lot of value in presenting financials in a really easy to understand way, because your owners are making big decisions, they're approving strata fees or not.

26:48 So what I used to do with the largest strata that I used to be in, is I used to take their big complicated sheet and transpose it into a really simple format so people could actually follow, because I agree, some of the reports are just way too complicated looking even though they contain the same information.

27:13 Ryan Grant: Yeah, it's a good point, just a different way of presenting the info, right? But it's true, if your owners can't understand it then it's not doing its job.

27:25 Wendy Wall: No. When it comes to money, it is probably the most important thing to the whole owner group: how much is the strata fee, how much is it going up, why is it going up? If people can't understand that then it's really, really hard to get them on board to approve the funding that you actually need.

27:48 Ryan Grant: Good point. Yeah, with that being said then, looks like we'll get ready for the next presentation. So thank you so much Wendy for coming, and the two presentations were great. This is great new information, and congratulations on the new website that's coming. And we'll see if more people can sign up and become members, because there's lots of great information there.

28:12 Wendy Wall: Thank you, and thank you to everyone at BC Strata Tech, have a great day.

28:20 Ryan Grant: Thanks, take care.

28:20 Wendy Wall: Bye.