The objective of this task is, essentially, adjust the Quota value for next Financial Year.
First, estimate the total expected expense for next Year
The typical concerns of an Financial Plan are:
- The Current Net Income (see Income Statement)
If the Income is positive it means that can cover at, at least, ordinary expenses. If negative, it means that current Quota values are not enough.
Current Net Income doesn't include Extraordinary Income and Extraordinary Expenses. Current Net Income is better for this purpose than Net Income because:
- Planed maintenance expenses like painting, if included in savings plan, are payed width money from savings account. This way they do not need to be included in next Year budget.
- Any repairing that occur in the present Year is an extraordinary expense, extraordinary expenses are not expected to repeat next year.
- Maintenance of realstate property
For example, repainting is needed after 10 years and it costs 30 thousand dollars. To prepare for this expense, the homeowners should save 10% of 30.000 dollars each year. Savings should cover all maintenance required, like elevators, automatic doors, and other assets that require maintenance from time to time.
To achieve the total amount, take in consideration the aspects that you consider relevant for your case. In the worksheet provided fill the amount for each aspect in the Expected Expense Column.
Summing all Expected Expenses gives the total amount of money required for next Year.
Second, divide the Expected Expense by all Homeowners
If everyone pays the same, the Quota value should be equal to : total expense / 12 months / number of homeowners.
Normally this is not the case. The typical is every homeowners Quota be proportional to value of his fraction. In this case the Quota for each homeowner should be equal to : total expense * his percentage / 12 months
Fulfill the Next Year column on the Financial Plan for next Year and check if the Validate field equals zero. This field is the difference between total Expected Expense less Total Next Year Quota Income.