CMS Funding Accounting - How to use the Cash Distribution By Fund

  • Clients who have multiple funds, but only one checking account, may want to use the Cash Distribution by Fund process to maintain a proper balance on the single checking account, while still producing a Statement of Financial Position report that correctly reflects the portion of that checking account that belongs to each fund.

Such activities include:

Setup

• Data Entry

Cash Distribution by Fund Report

End of Month Journal Entry


Prior to using the Cash Distribution by Fund process, several items must be set up:

1.  From the Options menu, choose Define Account Code Dimensions. Set the number of Digits at Fund to 2. Click OK. 

The system will detect that a change was made to the account code structure. It will examine and rebuild the existing account code information to apply changes. Click Yes to continue.

2.  From the Options menu, choose Fund setup. Create a new Fund number 99 called Cash Distribution by Fund. Click OK. Click Close.

3. From the Entry menu, choose Account Entry. Create a new Account called Checking Account – All Funds.

  • Set the Type to Asset.
  • Set the Fund to Fund 99.
  • Click the find Next button at Sequence.
  • Set the Class as per your chart of accounts concept of Checking and Petty Cash.
  • Check the checkbox at Bank Account.
  • Click OK to save this new account.

 

4. Create another New Account called Contra Checking Account.  

  • Set the Type to Asset.
  • Set the Fund to Fund 99.
  • Set the Class as per your chart of accounts concept of Checking and Petty Cash
  • Click the Find Next button at sequence.
  • Do not check the Bank Account checkbox.
  • Click OK to save this new account.

5. Create another New Account called “Fund 1” Checking Balance.  

  • Set the Type to Asset.
  • Set the Fund to Fund 1.
  • Set the Class as per your chart of accounts concept of Checking and Petty Cash
  • Click the Find Next button at sequence.
  • Do not check the Bank Account checkbox.
  • Click OK to save this new account.

 6. Create another New Account called “Fund 2” Checking Balance. 
 

  • Set the Type to Asset.
  • Set the Fund to Fund 2.
  • Set the Class as per your chart of accounts concept of Checking and Petty Cash
  • Click the Find Next button at sequence.
  • Do not check the Bank Account checkbox.
  • Click OK to save this new account.

7. Repeat step 6 for any other funds that may have income or expenses that will involve the common checking account for all funds.

Enter transactions (Bills, Deposits, Journal Entries, etc.) using the Checking Account – All Funds as normal (even if the items listed on the transaction cross funds):

 

1. Enter any Beginning Balances to the Checking Account – All Funds as needed.
2. For example, you may enter a Bill to the Telephone Company, paying both the church portion of the bill and the daycare portion of the bill.
3. You may also enter deposits to the Checking Account – All Funds and use whatever Income account is appropriate.
4. You may also enter any Journal Entries using Checking Account – All Funds as needed.
5. Reconcile the bank account Checking Account – All Funds as normal.

After all transactions have been entered for the month, and the Checking Account – All Funds bank account has been reconciled, but prior to printing End of Month reports, print the Cash Distribution by Fund report:

1. From the Reports menu, choose Transactions, then Cash Distribution by Fund.
2. Select the Checking Account – All Funds bank account in the Bank Account field.
3. Set the Date Range to Current Month.
4. Select the Report Format Register – All Transaction Detail if you want to view all of the detailed entries.
5. Select the Summary – Totals Only to view a summary total page that you will need to create the Journal Entry in the following step.
6. Click Print.

You must create a Journal Entry to redistribute the transaction totals to the correct funds. Once this is completed, and the Calculate Balances process has been run, the Statement of Financial Position report will reflect the correct assets per fund:

1. From the Entry menu, choose Journal Entries.
2. Enter a new Journal Entry; click the New Journal (+) command button. A new journal entry number will be created. The current Rundate will be entered automatically.
3. Using the Cash Distribution by Fund Summary report as a guide, enter the appropriate entries to update the asset’s balance:

  • Total Deposits should be entered as Debits to the Fund’s Asset Account.
  • Total Checks should be entered as Credits to the Fund’s Asset Account.

4. Click the Memorize button at the top of the display to Memorize this transaction.
5. Once complete, click Close.
6. Click Process | Calculate Balances | Finish.



7. Print Reports and Statements, and complete the steps on the End of Month Checklist.

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