Cash Management is CommunitySuite'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. Rebalancing funds and accounts is handled through the Cash Management screens. Balance Swaps are system-suggested movements of money based on how a fund is defined and where its money is currently invested or held. It is recommended that cash balance swaps be made weekly, if not daily, to maintain an accurate and up-to-date record.
For example, a $5,000.00 donation to the Do Good Fund is deposited into a checking account, but technically, the Do Good Fund is housed in a long-term investment account. In the meantime, a grant check of $5,000.00 is written out of the checking account. Using cash management, the check can be written without concern about moving money over. The system will keep track of the overall balance for each account and fund.
Cash management will ensure that the checking and investment accounts are rebalanced. When cash management is run, the system will display any transfers of assets from one account to another, and it will display the amounts that need to be transferred so that each fund and each account has the proper balances.
Who: Finance and accounting teams managing investment strategies, account rebalancing, and cash movement across funds.
When to Use Cash Management
Use cash management to:
- Automate recommended money movement between checking and investment accounts based on how funds are defined and where assets are currently held.
- Set up and assign investment strategies that define how fund assets are distributed across accounts.
- Maintain a flat dollar amount in a designated account while the remainder follows a percentage-based investment strategy.
Enable Manage Cash on an Account
To enable manage cash on a bank or investment account in CommunitySuite:
- Navigate to the Accounts page.
- Click a bank or investment account ID.
- Locate the row of buttons at the top of the record, and then click Edit.
- Check the Manage Cash box, and then click Save.
Create Investment Strategies
To create an investment strategy in CommunitySuite, add the strategy record and then assign the investment accounts that will be included in the strategy.
- Navigate to the Accounts page and click Investment Strategies in the left-side menu.
- Click Create in the left-side menu.
- Complete the applicable Create Investment Strategy fields, and then click Create.
- Click Add Account in the left-side menu.
- Click the name of an investment account to be added.
- At this point, there is only one investment account added to the strategy, so the percentage held will be 100.00%.
- At this point, there is only one investment account added to the strategy, so the percentage held will be 100.00%.
- Repeat steps 4 & 5 to add additional investment accounts.
Edit Investment Strategies
To edit an investment strategy in CommunitySuite, locate the existing strategy record and update the percentage held by each assigned account.
- Navigate to the Accounts page and click Investment Strategies in the left-side menu.
- Click the investment strategy ID.
- Click Edit in the left-side menu.
- Edit the percentage held by each account, and then click Update.
- Use decimal form to indicate the percent for each account. In this example, 0.25 indicates that 25% of the fund is held in the 10001 Bank :: Money Market (A) account. The percentages must sum to 100%.
- To remove an account from the investment strategy, remove the percent for the account and adjust the values for the other accounts accordingly. Do not enter a zero. The percent field should be blank for the account being removed
Base Investment Strategy
A Base Investment Balance Investment Strategy allows you to maintain a specific dollar amount at all times in a separate investment account, while the remainder of the fund's balance follows the percentage-based investment strategy in your primary pooled account. The fund base balance account cannot be one of the other percentage accounts that are in the strategy.
If a fund does not have enough available assets to reach the configured amount, the system will only swap what is actually available and will not recommend transfers that would create negative balances.
Use a Base Investment Strategy to:
Maintain Fixed Amounts in Separate Investments
If you have large funds that are part of a pool, but also have small separate investments, you can maintain an amount in the separate account while reinvesting those gains back into the main pool. For example, a fund may be primarily invested in a pooled account but also maintain an exact dollar amount, like $100,000, in a separate offshoot investment account at all times.
Impact Investing and Loan Allocations
If your organization makes loans or impact investments, you can set up a new investment strategy per fund to allocate a specific amount to be maintained in an impact investment or loan account. This option can then make sure that amounts received back in interest on the loan align with fund agreements, if applicable.
Manage Illiquid Investments
Organizations can use a base investment balance investment strategy for non-liquid investment accounts while keeping Manage Cash enabled. Balance swaps prioritize accounts with percentage-based strategies over flat amounts when processing AP swaps, allowing you to see how much needs to be transferred while truing up accounts.
Replace Fund Setting for Min Checking Account Balance
The fund setting for Minimum Checking Account Balance may no longer be needed if it is being used to maintain a fixed amount (such as $10,000) in a checking account while keeping the rest invested.
To set up a base investment strategy:
- Edit an existing investment strategy.
- Enter the Fund Base Balance Account and Fund Base Balance, and then click Update.
How Balance Swaps Handle Base Balance Investment Strategies
Balance swaps follow this priority order:
- Negative Account Balances - Corrects any negative balances in checking or investment accounts.
- Upcoming Accounts Payable (AP) - Ensures funds are available for upcoming payments.
- Minimum Fund Balance Settings - Keep Spendable on Checking or Minimum Checking Account Balance settings.
- Fund Base Balance Amount - Maintains the specified dollar amount in the designated account.
- Percentage-based Investment Strategy - The percentage breakdown for the fund(s) across investment accounts.
Configure Fund Settings for Cash Management
To enable cash management on a fund, check the Manage Cash box and assign an investment strategy and checking account in the fund's Cash Management settings.
- Navigate to a fund.
- Locate the row of buttons at the top of the record, and then click Edit.
- Complete the following in the Cash Management section, and then click Save.
- Check the Manage Cash box.
- Select an investment strategy from the Investment Strategy drop-down menu.
- Select the checking account that a donation should be deposited into from the Checking Account drop-down menu.
An investment strategy must be assigned to every fund in CommunitySuite for cash management to function. The investment strategy identifies the bank or investment account that contains each fund's assets.