About Owner Funds & Clearing Accounts

Clearing accounts

Fund ownership of a bank account causes the bank account to become a clearing account. The main advantages of using clearing accounts are:

• A clearing account minimizes the number of checks that must be written. For example, if an employee receives payments from several different funds, each fund can be tied to the same bank account so that the employee can receive one check.

• A clearing account also helps minimize the number of voided checks. For example, take the case of a payment allocated across several funds, each of which uses a different bank account where a clearing account has not been used. The payee will receive multiple checks, one for each fund with a different bank account. If one of these checks needs to be voided, each of the other associated checks must be voided as well to completely back out the entire payment.

• Using a clearing account makes it easier to audit and track transactions associated with payments.

Fund ownership

Fund ownership is setup in the Bank Account Detail window while adding bank accounts to a bank.

• If a bank account has an owner, you can associate different funds that can use the bank account but must reimburse the owner fund.

• When checks are issued for an associated fund, Due To and Due From transactions are generated to transfer money between the associated fund and the owner fund.

Defining Due To/Due From transactions

Due To and Due From transactions may be made more or less specific depending on the Use Specific Due To/Due From parameter in System Configuration.

• If this parameter is set to No, the generic Due To balancing account code and generic Due From balancing account code for the fund are used.

• If this parameter is set to Yes, AptaFund uses a more specific balancing account code.

• • For Due To transactions, it looks for the Due To balancing account code for the fund type that matches the owner fund.

  • For Due From transactions, it looks for the Due From balancing account code for the fund type that matches the source fund.

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