Practical guide
Advances and balances in a condominium: how to manage them
In a condominium, advances are the sums requested during the year on the basis of the budget, while the balance is the final adjustment that arises from the comparison with the final statement. Managing this cycle well means sizing the advances correctly, collecting them regularly and closing the year with contained balancing charges. The basis is Article 1135 of the Italian Civil Code, which entrusts the owners' meeting with approving the budget and the final statement, and Article 1130, number 10, on the annual report. This guide explains how to let advances and balances flow without surprises, with numeric examples.
Advance and balance: two different moments
The advance is a payment made ahead of time: it is paid before the real cost is known, based on the budget estimate. The balance is instead the closing payment, computed when the final statement is ready and approved. Between the two lies the balancing charge, the difference that may be owed or credited for the individual owner.
Distinguishing the two moments also helps in accounting: advances feed the cash position during the year and cover payments to suppliers, while the balance serves to rebalance individual positions at year-end.
- Advance: paid during the year on the budget
- Balance: paid at year-end on the final statement
- Balancing charge: the difference between the two
How to size the advances
Good sizing starts from the budget split into instalments consistent with the real deadlines of suppliers. If the condominium pays lift maintenance every quarter and utilities every two months, the advance instalments should be staggered so the cash position never comes under strain. Asking too little means being unable to pay suppliers; asking too much generates credits to refund and discontent.
Example: an annual budget of 24,000 euros split into four quarterly instalments of 6,000 euros each. The owner with 150 thousandths pays in each instalment 6,000 times 150 divided by 1,000, that is 900 euros, for an annual total of 3,600 euros in advances.
- Instalments aligned to supplier deadlines
- Advances neither oversized nor insufficient
- Example: 150 thousandths on 24,000 euros a year, 900 euros per instalment
Keeping collections under control
Managing advances breaks down when collections do not arrive on time. A clear payment schedule, with prompt reminders, keeps the cash position balanced and prevents punctual owners from ending up covering defaulters. It is good practice to periodically reconcile the advances paid with the condominium's bank statement, in line with the dedicated bank account obligation of Article 1129 of the Italian Civil Code.
Recording each payment against the correct owner's position is essential: an advance credited by mistake produces, at year-end, a wrong balancing charge for two people.
From balance to balancing charge
At year-end, for each owner, the total advances paid are compared with the share due under the final statement. If they paid less than owed, the balance is a charge and they must top up; if they paid more, a credit accrues. By approving the final statement, the owners' meeting also decides how to treat credits: direct refund or offset against the first instalments of the new year.
Returning to the example, the owner with 3,600 euros of advances whose real share is 3,400 euros closes with 200 euros credited. If instead the share were 3,900 euros, they would have 300 euros to pay as a balancing charge.
- Advances greater than the share: credit
- Advances less than the share: charge
- Owners' meeting chooses refund or offset of credits
Reducing errors with the right tools
Managing advances, collections and charges manually on spreadsheets exposes you to double counting and wrong attributions. Management software automatically links the advance instalments, the recorded payments and the final statement, computing each owner's balance without manual intervention.
AmministraPro keeps the budget, collections and final statement aligned and produces the balancing charge statements ready to communicate. The accounting features are described on the /funzioni page and the plans on the /prezzi page.
Frequently asked questions
Are advances mandatory for owners?
Yes. Once the budget is approved by the owners' meeting under Article 1135 of the Italian Civil Code, the advance instalments are due on the set deadlines. An owner cannot refuse to pay them while waiting for the final statement: the advance exists precisely to guarantee the liquidity to pay suppliers during the year.
What happens if advances exceed the real cost?
A credit balance forms for the owners. By approving the final statement, the owners' meeting decides whether to refund the surplus or offset it against the first instalments of the following year. Offsetting is the most common practice because it avoids cash movements and simplifies management.
Can I change the advance amount during the year?
The instalment amount stems from the approved budget. If it emerges that the real cost will exceed the estimate, the owners' meeting may resolve a supplementary advance. Without a new resolution the manager cannot independently increase the agreed instalments.
How do I stop defaulters from unbalancing the cash?
With a punctual payment schedule, timely reminders and periodic reconciliation with the bank statement. Monitoring positions in real time lets you act before the arrears become significant and, if needed, activate the recovery provided by Article 63 of the implementing provisions.
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