Revenue Share Parent

If a group of funds is invested in the same group of investment accounts and you wish to share revenue within the pool based on just one investment balance for each fund, then an investment pool with a Revenue Share Parent can be created.

To pool investment accounts, a Revenue Share Parent account will hold the fund balances, while the actual investment accounts are linked as sub accounts to track activities and reconcile the investment accounts.

Offsetting balances will be held on a system fund (Z_Cash_Balancing) to prevent double counting. 

Once the pool is established, gains and losses from the sub accounts will be shared based on the fund balances in the parent account.

For example, if you invest a group of funds with Schwab, the parent account is a pool of each Schwab investment. The account names and numbers listed below are taken from the image in step 2 below.

• 12007 Schwab - This is the parent account.
• 12009 Schwab Balanced Capital - This is currently a sub-account.
• 12010 Schwab Large Cap Growth - This is currently a sub-account.
• 12011 Schwab Small Cap Growth - This is currently a sub-account.

In this example, all the fund balances are held in the parent, 12007, and the asset balance is held by the Z_Cash Balancing fund in the child accounts, 12009, 12010, and 12011.

Rev Share Parent Account Setup

1. Navigate to the Accounts page.
2. Click the account Number.
   
    
3. Click the Settings Tab.
4. Click Set in the Rev Share Parent field.
   
    
5. Click the Name of an Investment Account.
    
    
6. Review the funds and balances that will move to the revenue share parent account. 
   • You will see a list of all the funds that are housed in that account. The new account that they will be associated with is listed under Swap To.
   • The system will ask if you wish to move these funds into the new asset account for the purposes of running the revenue share operation.
   • In order to link an account to another account for revenue sharing purposes, the system "swaps" these balances to the parent account. This can also impact the investment or checking account for those funds.
      
7. Click Yes, swap balances and make fund updates as needed.
   
    

The system will swap out the fund balances to the new account, and the account record will now reflect the change in the Rev Share Parent field.

Rev Share Parent Account Setup Options

The following Rev Share Parent Account Setup Options cover two typical scenarios that are used when setting the Rev Share Parent. 

Option A: The Pool Parent Initially Exists as a One Lump Sum Account

This option can be used if a pool parent already exists as a one lump sum account and subaccounts need to be created so that each account can be reconciled separately. This is usually the case when you receive separate account statements.

1. Create the subaccounts.
   • It is recommended to copy the parent account to a new account and adjust the account number to retain previous settings for the subaccount. Then copy the new subaccount to create more subaccounts with the same settings.
   • Set the parent in the Subof Account field.
   • Parent and subaccounts must have the same account type.
   • The Subaccounts and parent account must have Manage Cash turned on.
   • The Subaccounts cannot be part of an investment strategy.  
2. Set the Rev Share Parent on the subaccounts.
   • Steps 1-5 of the Rev Share Parent Account Setup section of this article provide details on how to set the Rev Share Parent.
3. Create account transfers using Z_Cash to the subaccounts to set up child balances in Z_Cash.
   • Account Transfers provides additional details on how to transfer money using the Cash Balance Fund option.

The parent then holds the fund balances and the same total amount as a negative Z_Cash balance, bringing the parent to a total balance of zero. The children will have a positive Z_Cash balance, offsetting the negative Z_Cash balance on the parent. Review the balances on a Balance Sheet with Show SubAcct selected in the left-side menu. All balances are now showing on the subaccounts. The parent account should not show a balance.

In case there were uncleared checks and/or deposits on the parent, follow the Beginning Balance: First Reconcile process to establish those uncleared items on the subaccount(s).

Going forward, all transactions will be recorded on the child accounts. Vendors and, if applicable, Advisors will be set on the subaccounts. Statement Vouchers will be recorded on the subaccounts to the Z_Revenue Share Holding fund. Money Transfers will be recorded/requested on the subaccounts. Bank Reconciliations will be done on the subaccounts. Investment Strategies must point to the parent, not to the subaccounts.

Option B: Subaccounts Already Exist with Balances

This option can be used if subaccounts already exist with balances.

1. Create the parent account.
   • It is recommended to copy a subaccount and adjust the account number to retain previous settings for the parent account.
   • Parent and subaccounts must have the same account type.
   • The Subaccounts and parent account must have Manage Cash turned on.
   • The Subaccounts cannot be part of an investment strategy.  
2. Set the parent in the Subof Account field on the existing subaccounts.
3. Set the Rev Share Parent on the subaccounts.
   • The Rev Share Parent Account Setup section of this article provides details on how to set the Rev Share Parent and shows how this will automatically trigger a transfer on Z_Cash out of the subaccounts to the parent account. Enter a swap date for that transfer; this can be backdated.

Going forward, all transactions will be recorded on the child accounts. Vendors and, if applicable, Advisors will be set on the subaccounts. Statement Vouchers will be recorded on the subaccounts to the Z_Revenue Share Holding fund. Money Transfers will be recorded/requested on the subaccounts. Bank Reconciliations will be done on the subaccounts. Investment Strategies must point to the parent, not to the subaccounts.