By Rafael Aquino

Published July 15, 2020  


Last week I provided tips on the importance of staying on top of your receivables.  This week and I wanted to write about the steps you should be taking if you start to see your percentage of delinquencies increase. As I mentioned last week, I don't believe we see the real picture of this pandemics financial impact on associations yet; however, I think we'll start to see the actual image in twelve to eighteen months from now, so you should start planning now.


First, you want to know what your association's receivables baseline is.  Treasures and managers should know what an average delinquency rate is for your community during good times, assuming you had a firm collection policy. The Treasurer and manager should be comparing that baseline number to the current month so you can gauge if things are looking good or turning for the worst.


Second, know where you are with your expenses.  Dive deep into how much has been spent this year and what will be allocated through the end of the year.  Will you have excess funds this year?  Will you fall short?


Third, as associations that are on calendar years start to prepare for 2021 budgets, it's essential to keep two-line items in mind. First, do you have a bad debt line item? If you don't, you should probably consider adding one for your association.   If you do, is it sufficient to cover for potential delinquencies in 2021? The percentage that should be added is based on each association and its demographics; however, if you see your accounts receivables getting worse, you may need to project for a higher percentage. Second, many associations have had additional expenses because of this pandemic.  Those expenses will probably continue throughout 2021, so a line item should be considered.


Finally, boards with tight cash flows may need to consider amending their budget now to avoid more prominent problems in the future. If you are considering an amendment now, it may also be the time to consider a line of credit. Having to borrow will cost you more in the long haul; however, it allows you to take only what you need.  Remember, once the receivable gets above eight to ten percent delinquent, there won't be many options of banks willing to lend you money.


While the above might not apply to those associations which have budgeted properly and reserved for rainy days, however for most, it probably will. It's not what you do during the good times that defines good leaders (board members) but what you do during trying times. Michelle Templet said it best, "Doing nothing is even worse than doing the wrong thing."

HTML Comment Box is loading comments...




As the Co-Founder and CEO of Affinity Management Services, Rafael P. Aquino leads his team to redefine excellence. They serve community   associations   efficiently

and effectively with dedication and passion. Rafael’s energy and positive spirit is the foundation of Affinity Management Services’ company culture, which instills enthusiasm and excitement when providing expert advice to its board members and relieving the day-to-day burdens of running a community association.


Since 2007, Rafael has developed a work culture that values responsive and high-quality services. He has led his team by following a proactive vs reactive philosophy. The same approach Rafael instills in the day to day operations of each association. Today, Affinity Management Services maintains its success and benefits as a result of the foundation Rafael has built and continues to foster by providing educational seminars, continuing education classes for association managers and board members alike.

Rafael and his team help condominium and homeowners’ associations save money and improve their communities. His calm, personable, and service-oriented nature helps him to establish strong relationships with ease. Rafael is known as a sincere and honest leader who looks out for the best interests of his clients and communities, and he strongly advocates for their needs. His role requires coordination and communication, as such he takes logical and intelligent steps to approach challenges head-on.

As a graduate of Florida International University’s electrical engineering program and a licensed community association manager, Rafael’s education and skills equip him with unique insights to tackle complex problems through critical thinking. He understands how each component within a system works together in order to effectively arrive at solutions, techniques, and conclusions. Therefore, as he manages the multiple challenges of running a community association management company, he understands how each property is its own unique system and tailors’ specific services to assure that all their needs are met.

For more information about Rafael P. Aquino and Affinity Management Services please visit www.ManagedByAffinity.com or call 1-800-977-6279

Doral Office: 8200 NW 41st ST

Suite 200

Doral, FL 33166

Broward Office: 150 S Pine Island RD Suite 300

Plantation, FL 33324

O: 800-977-6279 ● F: 305-325-4053

Sign up for Email Updates
For Email Newsletters you can trust