Summary

The Interest Allocation feature is used to allocate the interest that is earned on a bank account to the cash account on the bank record that is set up in multiple funds.

For example:

Cash account attached to the bank account record: -0-000

Revenue account selected in Interest Allocation window: -0-001

Ending Balance of GL account 1-0-000 = $200.00

Ending Balance of GL account 2-0-000 = $400.00

Amount of interest to be distributed = $10.00

If you distribute the interest amount based on the ending balance of the cash accounts, $3.33 of the interest will be distributed to GL cash account 1-0-000 ( 200/(200+400) X $10.00), and $6.67 of the interest will be distributed to the GL cash account 2-0-000 (400/(200+400) X $10.00).

The revenue account (generally an interest income GL account) selected in the Interest Allocation window will be credited and the cash account on the bank account will be debited on the journal entry created by the process.

GL cash accounts are attached to bank account records using the Bank Account Maintenance window (SS> Maintenance> Bank Account> Cash Account field).

 Step by Step

1     Create a journal entries batch.

• Select the Journal Entries palette in GL> Journal Entries. This will expand the Journal Entries palette and display the steps of the Journal Entries process.
• Select New from the Journal Entries batch number drop-down menu to create a new batch. This will open the New Batch window.
  • If there are open batches in the Journal Entries process you can create a new batch without affecting the open batches.
• Enter a Batch Month and Batch Year. These fields default to the current calendar period and are used for reference only. The batch month and batch year do not affect the journal entry date of the journal entries created in the batch.
  • The journal entry date is set up during the Settings step (GL> Journal Entries> Settings> Journal Entry Date field).
• Click the Generate icon   to populate the Batch Number field with the next available batch number. Batch numbers are limited to five digits and must be unique within the batch month of the batch year.
  • You can also manually create a new batch by entering a Batch Number and clicking the Save icon  .
• Highlight the batch in the batch number drop-down menu on the Journal Entry palette and press DELETE to delete a batch. Any uncommitted journal entries in the batch will be deleted.

2     Select the journal entry date of the journal entries in the batch.

• Open the Settings window (GL> Journal Entries> Settings).
• The Period Type drop-down menu is used to select the type of period you would like to generate the journal entries in.
  • Select Standard if you would like to post the journal entries to a fiscal period.
  • Select Adjustment if you would like to post the journal entries in the batch to an adjustment fiscal period (fiscal period 13).
    • This selection only applies to adjustments that you would like to post to the adjustment fiscal period. If you are making an adjustment, you are not required to post it to the adjustment fiscal period. For example, if you are creating a reversing journal entry and would like to post the reversal to a fiscal period and fiscal year based on the journal entry date, select Standard.
• The Journal Entry Date determines the fiscal period and fiscal year the journal entries in the batch will be posted to.
• The Fiscal Period and Fiscal Year fields will populate with a fiscal period and fiscal year based on the selection in the Journal Entry Date field.
• Press ENTER or click the Save icon when complete. This step will be processed by the application server, so it may take a few moments to complete. Open the Jobs Viewer window (Jobs Viewer icon on the main desktop) if you would like to view the progress of the Settings step.

3     View the journal entries in the batch.

• After the Settings step is complete, open the Journal Entry Selection window (GL> Journal Entries> Journal Entries) to view the journal entries in the batch. This window will be empty if you have created a new batch, but if you have opened an existing batch the window will display the journal entries in that batch.
• Highlight a journal entry and press DELETE or click the Delete icon   to delete a journal entry.
• Click the Generate icon drop-down menu and select Generate Interest Allocation to create a new interest allocation.

4     Create the interest allocation.

• The Bank Account field is used to select the bank account where the interest was generated. The GL cash account attached to the selected bank account will be used to distribute the interest.
  • Bank Accounts are created and maintained using the Bank Account Maintenance window (SS> Maintenance> Bank Account). The cash account is attached to the bank account record using the Cash Account field on the Bank Account Maintenance window.
• The Revenue Account field is used to select the GL account you would like to allocate the interest to. This is the GL account that will be credited in the journal entries created in the process. The GL account selected in this field must be set up in each fund where the cash account on the bank record exists.
  • For example, if cash account 1-0-000 is attached to the bank record and exists in fund 9 (9-0-000), there must also be a revenue account in fund 9. If the revenue account does not exist in fund 9, the interest that should be allocated to the cash account in fund 9 cannot be distributed because there is no GL account to credit in the transaction.
• Enter the amount of the interest to the distributed in the Interest Amount field.
• The Allocation Type drop-down menu is used to select how the interest will be allocated.
  • Select the Average Daily Balance to distribute the interest based on the daily balance of the cash accounts.
  • Select Month End Balance if you would like to distribute the interest based on the month end balance of the cash accounts.
• Press ENTER or click the Save icon to generate the interest allocation journal entries.
• The journal entries generated by the process will display in the Journal Entry Selection window.

5     Commit the journal entry.

• Print a Proof List Report (GL> Journal Entries> Proof List) and run the Commit step (GL> Journal Entries> Commit) to commit the journal entries.