A S&Co Story - Housing Society Accounting

 


“Housing Society Accounting – A Conversation in the CA Office”

“Dhawal Sir,” said Sadhana, cautiously poking her head into the cabin, “I’ve been assigned to assist you with society accounts. I’ve never handled one before.”

Dhawal looked up with a grin. “Welcome to the wild world of managing people’s buildings and their books. Housing society accounting may look simple, but it's a miniature version of a corporate setup - with politics, deadlines, and everything in between.”

Sadhana took the chair. “So, where do we begin?”

“First,” said Dhawal, pulling up a spreadsheet, “remember: a co-operative housing society isn’t just about collecting maintenance and paying for repairs. There are statutory registers, proper classification of funds, audits, AGMs, and increasingly, digital payments and compliance.”

At this point, Prajakta, walking past the cabin, overheard them and popped in. “Tell her about the sinking fund fiasco at Shree Ganesh Towers, Dhawal Sir.”

Dhawal chuckled. “Ah yes, they were crediting their sinking fund into the same account as repairs and not maintaining a separate ledger. When they needed to claim a corpus-based repair grant, they had no documentary proof. Clean accounts aren’t just a formality - they save you money.”

Sadhana nodded, scribbling notes. “What are the main heads of income and expense?”

“Primarily,” Dhawal said, “income includes maintenance, interest on fixed deposits, parking fees, rental income from cell towers, etc. Expenses range from security, repairs, water charges, and electricity to annual functions and auditor’s fees.”

“And what about statutory compliances?”

“Great question,” said Jagruti, walking in with her coffee. “Societies need to file annual returns with the registrar, conduct audits, and in many states, file GST if they cross specified thresholds or charge certain members above limits. Plus, if they earn interest from banks, TDS might apply. It’s not all residential innocence - some of these societies have FD portfolios bigger than small businesses.”

Sadhana’s eyes widened. “So, do we follow the same accounting standards as we do for companies?”

“Nope,” said Dhawal. “Societies follow cash or modified cash basis. Simplicity is the key, but transparency is the soul. The books must be understandable to a lay committee member - usually a retired banker, engineer, or enthusiastic homemaker.”

Prajakta added, “And don’t forget internal controls. One cheque signatory falling ill shouldn’t paralyze payments. We recommend at least two-tiered authorisation.”

Sadhana smiled. “Sounds like a perfect mix of accounting, people skills, and community economics.”

“You got that right,” said Dhawal. “And remember, we aren’t just accountants. We are peacekeepers, budget guardians, and sometimes, marriage counsellors when committee members fight.”

Everyone laughed.

As the session ended, Jagruti said, “There’s an art in keeping the building together. It starts with balanced books.”

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