Creating Investment Account Records

Creating Investment Account Records

If there is only one Investment Account per Pool, you can either add it manually via the Account tab or use the Auto build FACTS Initial Fund Values utility to automatically create the Investment Account record and the initial Investment Account balance record. Refer to Autobuilding FACTS Initial Fund Values for more information.

NOTE: Even if you use the Auto build FACTS Initial Fund Values utility, you may want to use the Account tab to change the Name of the Investment Account. If you auto build, the Account Code will be the same as the Pool ID.

1. In FACTS, click the Accounts super tab and then click the Account tab.

2. Click the New button on the toolbar.

Account Tab

3. In the Account Code field, enter the code (up to sixteen characters) that you want to use to identify the account in FIMS.

TIP: Consider using the actual account number assigned by the bank as the Account Code.

4. In the Pool field, enter the Pool ID code that identifies the Pool where the Investment Account resides.

5. Select the Unitized checkbox. This indicates that the account is part of a Pool.

IMPORTANT: You must select this checkbox if the account is part of a Pool. If you clear it, no transactions will flow from General Ledger to FACTS.

NOTE: The remaining data entry fields are optional. Refer to the Account Tab for more information on all of the available fields.

6. Click the Save button on the toolbar.

7. Click the Initial Balance button at the bottom of the Account tab. The Initial Account Balance window opens.

Initial Account Balance Window

8. Click the Add Initial Balance button.

NOTE: All of the fields are grayed out until you click the Add Initial Balance button. When you click the button, it changes to a Delete Initial Balance button.

9. Enter the Ending Market Value from the last reconciliation. 

NOTE: If you are tracking Book or Income, enter the appropriate Ending Book Value and / or Ending Income Balance. 

10. Enter a Begin Date and End Date that are one day prior to the beginning of the first Cycle you want to reconcile. For example, if the Cycle begins on 01/01/2009, you should enter 12/31/2008 in the Begin Date and End Date fields.

11. Click the Done button.

Tip: The Default Deposit / Disbursement Account

While FACTS can track more than one Bank Account per Pool, it only allows one default Deposit Account and one default Disbursement Account for each Pool.

In most cases, the same Custodial Bank Account is identified as the default Deposit and Disbursement account. This means that when posted Fund level Transactions flow automatically from General Ledger, they will be attributed to a single Account in FACTS.

If your organization normally uses one of its Investment Accounts (money managers) for deposits and disbursements from the Pool, that account will be the default.

If your organization uses a money market investment account for deposits and a checking account for disbursements, you will have different default deposit and disbursement accounts.

Since the system assigns the account, the Transaction goes to when you post General Ledger Journal entries, it is possible to change either the Deposit or Disbursement account on the Pool record to reflect the Investment Account that the majority of these entries come from. Once you post the entries, you can change the Deposit and / or Disbursement accounts back to their default values.

NOTE: It is more common to change the Deposit account. You will rarely change the Disbursement account. However, if you are moving money from one Pool to another, it may be helpful to map the Disbursement line for the Pool that the money is coming from to the Pooled Asset Account that the money is moving to. If you want to show these Transactions in a particular Investment Account in the Pool receiving the money, then it is best to change the default deposit account for the recipient Pool before posting the Journal entries resulting from the first Pool’s FACTS reconciliation. If you make the change, these transactions will automatically flow to the correct investment account.

If your organization generally uses deposits and disbursements to regulate investments among money managers, it may be useful to create a Dummy default Deposit / Disbursement Account. All FIMS General Ledger Transactions will flow into this Dummy Account. During Account Reconciliation the entire net deposit / disbursement is entered on the Disbursements line as a negative value (assuming a net increase), so the Dummy Account will end the Cycle with a zero balance.

As the actual bank Accounts are reconciled, the net Transactions to each are entered on their Disbursements line. The net of the entries on the Pool’s Disbursements lines is zero. For example, if a Pool has two Investment Accounts (A and B) and a Dummy Account (C), all of the Transactions flow to the Dummy Account. Since this account has now real bank statement, its net transactions for the Cycle must net to $0. If the net value is $10,000, you would enter -$10,000 on the Disbursements line for the Dummy Account. In Account A, the net activity was $4000. Since there are no Transactions in this account, you would record a $4000 transfer by entering +$4000 on the Disbursements line. This will result in an investment statement that will balance for A. There is a similar situation with Account B, except that the transfer amount is $6000. At the Pool level, the +4,000, +6,000 and –10,000 will net to zero and show that nothing was really distributed from the Pool.

Closing an Investment Account

NOTE: Once you close an Investment Account, it will no longer appear on the Reconciliation Data Grid.

1. Transfer all assets from the account (for example, by entering the amount on the Disbursement line on the Reconcile tab).
2. Allocate and post the Cycle during which the remaining assets were transferred from the account.
3. Use the Accounts Data Grid to select the Account you want to close, and then click the Account tab.
4. In the Date Close field, enter the date when you want to close the account.

NOTE: The actual date you enter is not important to FACTS. However, you should enter a date that falls within the just-posted Cycle (for example, the last day of that Cycle).

5. Click the Save button on the toolbar.