Do tenant management organisations need an accountant?

Tenant management organisations (TMOs) allow residents of council housing or housing association homes to take over some or all housing management tasks on behalf of their local council.

Under this arrangement, the landlord still owns the properties and, in the case of local authority housing, all residents remain tenants of the council. 

TMOs offer numerous benefits to tenants by giving them power in decision-making processes, helping to foster a sense of ownership and improving communication with landlords. 

However, TMOs should have an accountant to ensure proper financial management and transparency within the organisation. In this article, we explain why in greater detail.

 

Financial management

At their core, TMOs are financial entities: they collect rent and chase arrears, let houses to new tenants, and arrange maintenance, major works and cleaning services. They also employ staff to maintain the housing complex and deal with neighbour disputes. 

As such, TMOs need to keep a close eye on their finances to ensure they can continue arranging the services they’ve been tasked with overseeing, while providing value for money.

An accountant will prove invaluable by helping with this. They can prepare budgets to help TMOs remain within their means. They can also help with bookkeeping to keep track of income and expenses, ultimately helping the TMO understand its financial position and make better-informed financial decisions.

Moreover, having an independent professional overseeing your finances enhances transparency within the TMO, which is essential for an organisation that can raise money through service charges paid by its members. 

 

Compliance

TMOs are subject to various legal and regulatory obligations that are difficult to navigate — but hiring an accountant can help. They’ll be able to assist with tax obligations, financial reporting and accounts production. 

Accountants for TMOs will also keep up-to-date with evolving regulations so their clients can avoid legal issues and financial penalties. 

 

Audit and assurance

Regular audits are crucial and always on the radar for any organisation, including TMOs. Accountants specialising in both audits and TMOs will be able to conduct internal audits or work with external auditors to ensure your accounting practices are compliant with UK law. 

By putting your financial records under the scrutiny of a professional, you can also reassure members that the TMO’s finances are in order, being used for the benefit of the community and are not at risk of fraudulent activities. 

The process may also highlight opportunities that you could embrace and threats to avoid. From there, you can use your independent advice to improve the running of your TMO.

 

Collaboration with stakeholders

TMOs often have to interact with a number of parties, including housing associations, councils and external funding groups. Having an accountant to represent your organisation can help you navigate these interactions more successfully. 

For example, when you’re seeking funding, the presence of a qualified accountant can lend credibility and demonstrate the TMO’s commitment to financial transparency and accountability.

Additionally, an accountant can help you present financial information to stakeholders in a clear and understandable manner. This enhances communication, making it easier to build relationships and secure support for the TMO’s initiatives.

 

Conclusion

Having an accountant is crucial for the financial management, compliance, audit, and collaboration aspects of TMOs. Their expertise ensures transparent financial operations, adherence to legal obligations, assurance through audits, and effective communication with stakeholders. 

If you are running a TMO and in need of accounting services, reach out to our specialist accountants for TMOs who are ready to assist you in achieving financial success. Get in touch with us.