The Cash Management feature provides system suggested movements of money based on where a fund's money is currently held in relation to where a fund's investment strategy says it should be. It is recommended that cash management be done at least once a month before the revenue share calculation. However, the swaps can be done as often as desired to make sure the funds have the most up to date investment balances.
Cash management transfers involve four main components.
- Funds - The Z_Cash_Balance system fund involved with the balance swap process and any additional funds that you want to participate in the balance swap.
- The system uses the Z_Cash_Balance fund as a holding fund in the balance swap process.
- Investment Strategies - The defined accounts where a fund's money should live in the real-world.
- Accounts - The fund's default checking account involved with a balance swap along with any bank and investment accounts that are assigned to an investment strategy.
- Manage Cash/Cash Management - An account and fund level setting that must be enabled for each fund and account that participates in balance swap.
Set Up Cash Balancing
Cash balancing is the system's functionality that recommends the movement of money based on investment strategies and other cash management setup items on funds and accounts. Money movement or rebalancing is handled through the Cash Balancing Fund, which is a system default fund that nets to zero (0) total assets.
Set Up Investment Strategies
Investment strategies are used to assign investment accounts to funds.
Review and Process Cash Balancing Suggestions
At the end of each month, it is recommended that cash balancing be reviewed and processed. This is often referred to as a paper movement of money.
Once the real-world transfer of money with the bank is initiated, simultaneously transfer the money in your system. This must be done at the time in which the actual real-world transfer with your bank is made.
Cash Management Calculations
This article has an example that shows how the cash management calculations are made in the system.