Maintaining Checking Outside of the Pool

Maintaining Checking Outside of the Pool

Most organizations keep their checking accounts outside of the pool. This allows non-pooled Funds to use the same checking account. At the Fund-level, the organization needs to maintain adequate cash resources on a Fund-by-Fund basis, by tracking the Fund’s share of the common checking account in a General Ledger account. The goal is to keep the checking balance low and maximize returns from assets held in investment accounts.

Another approach is to use the checking account as a holding account for Gifts before you transfer them to investments or for keep Grant dollars that are awaiting distribution. Organizations that use this approach usually have an interest-bearing checking account. Sometimes excess cash is swept nightly into money market investments. The appropriate option depends on a number of factors, including the method you use to track the available balance.