As the accounting manager for an association management company (AMC), I deal with various types of accounting issues, software, financial questions, concerns, you name it! This allows me and my colleagues to have a wide range of knowledge navigating the accounting landscape of an association.  There are many benefits to having an AMC manage an association’s finances and here are five that go beyond just debits and credits.


Budgeting Best Practices

An association management company is beneficial for budgeting for several reasons. Firstly, we ensure that all our clients run their associations based on a previously established budget. This helps in managing cash flow, allocating appropriate resources to specific projects, and monitoring association performance.

Secondly, we keep the budget simple and straightforward so that every Board member can easily monitor the association’s financial health. This improves management and Board level decision-making and helps identify problems in advance of a crisis. Flexibility is also key in budgeting. We explore different types of budget models such as member-driven budgeting that involves the members in the budgeting process to ensure their needs are expectations are considered, fostering a sense of community or dynamic budget models that adapt to changing circumstances.

Lastly, we involve all team members in association planning, including event planners and membership coordinators. This allows us to balance the estimates and achieve a more realistic budget, motivating the entire team to strive to meet budgeted commitments.

In essence, an AMC can offer a critical resource to ensure the association survives and thrives, especially in times of growth, downsizing, or temporary interruption.


Diversifying Revenue Streams: Beyond Membership Fees

Diversifying revenue streams is a crucial strategy for any association. Relying solely on membership dues can be risky, especially in uncertain times. Therefore, associations need to explore other avenues of revenue generation to enhance financial stability.

For instance, events often bring significant additional revenue to an association. This can include conferences, tradeshows, webinars, or workshops. Revenue from these events not only covers the operating costs but also provides additional funds to increase member benefits and upgrade operational efficiencies.

Moreover, we can also explore non-dues revenue opportunities. This could include selling advertising space, offering certification programs, or providing sponsored content opportunities. These strategies not only increase your association’s revenue but also make membership more valuable.

Remember, the key is to find the revenue streams that best fit your members’ needs and align with your association’s mission and values.


Risk Management in Association Finances

Risk management is a critical aspect of financial management in an AMC. It’s key to understand financial risks, if not managed properly, can have severe consequences on an association’s operations and reputation.

A key tactic is to employ several strategies to manage financial risks. Firstly, ensure association leaders are prepared to take responsibility for financial items. This includes regularly scrutinizing expenses, monthly bank accounts, and asking questions if something looks abnormal. Also encourage directors and Board members to play an active role in reviewing monthly financial statements, audited financial statements, budgets, and payments.

Secondly, have robust fraud detection methods in place. If employees know that the company is diligently monitoring its accounts, they will be less likely to commit fraud.

Lastly, know the importance of financial education. Ensure Board members, staff, and members understand how their involvement affects the association’s bottom line. This empowers them to make better decisions and actively work towards the betterment of the association.


Technology Trends in Financial Management for Associations

Technology plays a significant role in financial management for associations. Here are some of the key technology trends:

  1. Association Management Software (AMS): This software helps manage membership, events, and other association activities. It often includes financial management features like budgeting, financial reporting, and dues collection.
  2. Online Transactions: The ability to conduct transactions online, such as membership renewals or event registrations, is now a necessity. This not only improves convenience for members but also streamlines financial management for the association.
  3. Mobile Applications: Mobile apps can provide members with easy access to association services and can also facilitate payments, making it easier for associations to collect dues and fees.
  4. Cloud-Based Accounting Software: This software allows for real-time access to financial data, making it easier to monitor and manage the association’s finances.
  5. Data Analytics: Advanced data analytics can provide valuable insights into financial trends and member behavior, helping associations make informed financial decisions.


Keeping up with these technology trends can be challenging. That’s how AMC’s help associations navigate these changes and make the most of the opportunities they present.


Transparency and Accountability: Communicating Financial Information Effectively

Transparency and accountability are key principles in managing an association’s finances. Effectively communicating financial information is crucial to uphold these principles. Here’s how to approach it:

  1. Clear Financial Reporting: We ensure that financial reports are easy to understand, even for those without a financial background.
  2. Regular Updates: We provide regular updates on the association’s financial status. This could be monthly or quarterly financial reports, annual audited statements, or real-time updates.
  3. Involvement of Board Members and Staff: We encourage the involvement of more board members, staff, and association members in the financial aspects of the association. This not only creates a culture of transparency but also instills greater confidence in the association from its stakeholders.
  4. Openness to Questions: We welcome questions about the association’s finances. If a board member or staff does not understand something presented in a set of financial statements, we encourage them to ask questions and ensure that their question and the answer are included in the minutes of the meeting.
  5. Education and Training: We believe in the importance of financial education and seek to provide knowledge to staff and volunteer leaders wherever possible.


By effectively communicating financial information, an environment of understanding and trust is created, which is crucial for the success of any association.