C LEARING F UNDS

If your organization uses four-sided accounting, you must identify a fund that will act as your “clearing” fund. This clearing fund will balance your transactions that cross funds.

It is usually the general, operating, or unrestricted fund that contains the primary checking account, asset, and liability accounts. The clearing fund in Sample Division 95 is the General Fund (fund 01).

When you define your journals, you must indicate due to/from and suspense accounts (due to/from accounts only apply to GL ID types, not P/G ID types). Your entry in the due to/from field defines your clearing fund. For example, in Figure 2.1 we have defined A01 00-00 1990 as the due to/from account for ID type A. This tells the system that fund 01 is the clearing fund.

Figure 2.1—ID Types Tab of Journal Definition

Invoices totaling $1,500 owed by the Water Plant Fund, fund 02, have been paid by the organization’s checking account in the General Fund, fund 01. The General Fund is designated as the clearing fund.

• Fund 01 - General Fund (the clearing fund in Sample Division 95) Due from Water Plant Fund

$1,500 DB

• Fund 02 - Water Plant Fund Due to General Fund

$1,500 CR

The General Fund shows the $1,500 as an asset due from the Water Plant Fund.

The Water Plant Fund shows the $1,500 as a liability due to the General Fund.

TRANSFER DIMENSIONS

When you define your account structure (as part of defining an ID type), you may also define a fund and transfer dimension, which identifies the dimensions to be used when an interfund transaction occurs. (When you select one of the system-defined account structures, the fund and transfer dimensions are also system-defined.)

The transfer dimension can also have another meaning within your account structure, such as the sub-department. Therefore, each dimension may have one meaning on Revenue and Expense accounts and something else on Balance Sheet accounts (Table 2.9).

Using an earlier example, invoices totaling $1,500 owed by the Water Plant Fund, fund 04, have been paid by the organization’s checking account in the General Fund, fund 01. The due to/from account is defined as A01 00-00 1990, so the transactions would look like this:

• A04 00-00 7142—$1,500 CR

• A04 00-01 1990—$1,500 DB (Amount in fund 04 due to fund 01)

• A01 00-04 1990—$1,500 CR (Amount in fund 01 due from fund 04)

• A01 00-00 1110—$1,500 DB

Table 2.9—Example Fund and Transfer Dimensions System-Defined 10-Digit Account Number Structure (XX XX-XX XXXX)

XX XX -XX XXXX

Fund Transfer Dimension

System-Defined 15-Digit Account Number Structure (XXX XX-XX XXXXX.XXX)

XXX XX-XX XXXXX .XXX

Fund Transfer Dimension

Example User-Defined Account Number Structure (XX-XX XXX.XXXX)

XX -XX XXX .XXXX

Fund Transfer Dimension

To complete the interfund transaction, the clearing fund works with the transfer dimension (defined when you define your account structure) to create paired due to/

from accounts (also called “clearing accounts”). These “due to/from accounts” maintain the balance due to or from an individual fund or the clearing fund by posting equal and opposite transactions. For more information, see Defining Your Due To/From Account Pattern on page 43.

Length of the Transfer Dimension

To enable the system to keep your funds in balance, the transfer dimension must have an equal or greater number of digits as the fund dimension (i.e., the transfer dimension cannot have fewer digits than the fund dimension). When your transfer dimension is longer than your fund dimension, the system fills the remaining digits with zeros.

Again using the Water Plant example, invoices totaling $1,500 owed by the Water Plant Fund, fund 04, have been paid by the organization’s checking account in the General Fund, fund 01. The due to/from account is defined as A01 00-0000 1990, so the transactions would look like this:

• A04 00-0000 7142—$1,500 CR

• A04 00-0001 1990—$1,500 DB (Amount in fund 04 due to fund 01)

• A01 00-0004 1990—$1,500 CR (Amount in fund 01 due from fund 04)

• A01 00-0000 1110—$1,500 DB

DEFINING YOUR DUE TO/FROM ACCOUNT PATTERN

When you define your journals, you must enter an account number in the Due To/From field. The system uses the fund dimensions specified in the Due To/From pattern (defined on the ID Types tab of the journal definition) and the account used in your transaction, along with the remaining numbers of the pattern, to determine your due to/

from account numbers (Figure 2.2).

Figure 2.2—Example Due To/From Accounts From Pattern

04 00-00 7142 Transaction account number:

Due To/From account pattern: 01 00-00 1990

The system takes the fund dimension from the Due To/

From pattern and places it in the transfer dimension, takes the fund from the transaction account and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

04 00-01 1990 The system takes the fund from the transaction account

and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

Again using the system-defined 10-digit account structure (XX XX-XX XXXX) as an example, let’s see what happens when you involve three funds (Figure 2.2).

Figure 2.3—Example Due To/From Accounts From Pattern

04 00-00 7142

Due To/From account pattern: 01 00-00 1990

The system takes the fund dimension from the Due To/From pattern and places it in the transfer dimension, takes the fund from transaction account number 1 and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

The system takes the fund dimension from the Due To/From pattern and places it in the transfer dimension, takes the fund from transaction account number 2 and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

05 00-01 1990 The system takes the fund from transaction account number 2

and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

The system takes the fund from transaction account number 1 and places it in the position of the transfer dimension, and retains the remaining numbers in the Due To/From pattern in their original positions.

Noted in bold, the remaining dimensions are taken from the Due To/From account pattern.

01 00-04 1990

DEFINING YOUR DUE TO/FROM ACCOUNTS

You should define your due to/from accounts, taking into consideration all funds that must balance with your clearing fund. If you do not define the due to/from accounts, the system will create the accounts “by posting” when you post your transactions. For more information, see:

• Created by Posting Accounts on page 68

• Viewing Transaction Information on page 152

• Viewing Account Balance Information on page 155

The Due To/From account is defined on the ID Types tab of the journal definition.

BALANCING ENTRIES—MANUAL OR AUTOMATIC

If you design you system using four-sided accounting, you can chose to create your balancing entries manually or to have the system create the entries automatically.

• Manual—You must enter all four transactions (i.e., the debit, the credit, and both balancing entries).

• Automatic—FundWare uses the Due To/From entry on the journal definition to enter the balancing entries. You must still enter the debit and credit transactions.

If these accounts do not exist at the time you post, the accounts will be

“created by posting.” For more information, see Created by Posting Accounts on page 68.