How to size the condominium cash fund

What the cash fund is really for

The cash fund does not finance new expenses: it fills the timing gap between the moment the condominium must pay a supplier and the moment it receives the instalments from owners. Many invoices arrive before all the shares are paid, and without a reserve the manager risks being unable to pay on time.

It is important to distinguish it from the contingency reserve fund and the special works fund: the cash fund is purely a current liquidity tool, not a cover for certain future or extraordinary expenses.

The method: start from the cycle of collections and payments

To size the fund you look at the real calendar of management. On one side you map the typical monthly outflows, fixed fees and utilities, and seasonal peaks such as winter heating supply. On the other you map the collection calendar, that is when the instalments approved by the meeting fall due.

The fund should cover the most critical period, usually the one in which outflows concentrate but collections are still partial. A prudent criterion is to size it to cover the fixed expenses of one or two months, increasing the cover if the condominium has a history of significant arrears.

• Map fixed monthly outflows and seasonal peaks
• Map the due dates of the instalments approved in the budget
• Identify the months in which outflows exceed cumulative collections

The arrears factor

Arrears are the variable that weighs the most. In a condominium where everyone pays on time a minimum fund is enough, while where a real share of owners pays late the fund must be larger to absorb missing collections without blocking payments to suppliers.

Analysing the collection history helps quantify this risk: if every year part of the instalments arrives months late, the cash fund must account for it. Be careful, though, not to use it as a substitute for managing defaulters, which must still be pursued with reminders and recovery actions.

Approval and transparency

The creation of the cash fund and its amount must be resolved by the owners' meeting, which also decides how to request it from owners. The fund must then be clearly represented in the accounts, so that its real availability and its nature as a reserve are always verifiable, as the transparency logic of Article 1130-bis of the Italian Civil Code requires.

The cash fund passes through the current account in the name of the condominium, like all management sums under Article 1129 of the Italian Civil Code: it must never flow into the manager's personal accounts.

• Meeting resolution on creation and amount
• Clear representation in the accounts and the explanatory note
• Custody in the current account held in the condominium's name

Monitor and update the fund

The cash fund is not a static value: it must be reviewed when conditions change, for example if fixed costs increase, if payment punctuality worsens or if the condominium starts a management with higher recurring outflows. An annual check, at the closing accounts, allows the amount to be corrected for the following year.

Management software such as AmministraPro helps keep liquidity under control with the cash journal and the due-date schedule, highlighting in advance the months at risk of overdraft. You can evaluate the tools on the /funzioni page and the plans on the /prezzi page.

Frequently asked questions