Cash balancing is the systems 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 are 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 are 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 balancing 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 balancing 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 each fund and each account has the proper balances.
Account Settings
- Navigate to the Accounts page.
- Click a bank or investment account ID.
- Click Edit in the left-side menu.
- Check the Manage Cash box, and then click Save.
Create Investment Strategies
- 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
- 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 percent 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.
- Do not enter a zero. The percent field should be blank for the account being removed.
- Use decimal form to indicate the percent for each account.
Fund Settings
- Navigate to a fund.
- Click the Settings tab.
- Click Edit in the left-side menu.
- 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.
To use the cash balancing feature, an investment strategy must be assigned to each fund in the system, which is the bank or investment account that contains a fund's assets.