Cash Balancing Overview*

Written by Dana Kinsey

Last published at: May 1st, 2019

Cash balancing is a unique process that you can use to manage and rebalance the Funds in your Fund Accounting system. Once all Funds and their default settings are set-up, you can utilize the Cash Balancing Function to rebalance Funds so you can see where to move assets.

To rebalance your Funds, we use a Cash Balancing Fund. The Cash Balancing Fund is a system default fund that has no Assets and always nets to zero (0). This overarching fund identifies where cash is and where cash needs to be moved in order to rebalance and track all Funds and show you the actual balances.

For example; a $5,000 Donation to the Do Good Fund is deposited into a checking account but technically the Do Good Fund is housed in a long-term investment account. In the meantime you are writing a $5,000 grant check out of the checking account, using Cash Balancing you can write the check and not worry about moving money over - your system will keep track of the overall balance for each account and fund so you don't have to. 

Cash Balancing will assure that your checking and investment accounts are rebalanced when you select Balance Swap. When you run a Balance Swap the system will show you if you need to make any transfers of assets from one account to another, and it will show you the amounts that need to be transferred so each Fund and each Account has the proper balances.

After taking in donations and paying out grants you will be able to see how this system works.