Post Unit Fund Distribution - Investment

Post Unit Fund Distribution - Investment

Purpose

There is functionality within the system to distribute income from loan accounts over Unit Fund Accounts using a rate of interest that is calculated at the time of the distribution.

A summary of the process is as follows:

Up to six Variable Loan Account Types may be selected for inclusion to the distribution. There is an option to distribute the accrued interest on the current and future ledgers as well as the interest actually earned on these ledgers.  The system will identify the interest earned from the Transaction Types selected as the Interest Charged Tran Type – Current and Future on the Account Type setup details.

It is possible to exclude specific Variable Loan Accounts from the distribution calculation by checking the Stop Distribution flag on the loan account.  This is useful if a loan is not performing, and the interest is not collectable.  When the Stop Distribution flag is checked off, the interest for the current period distribution will be included.  Any interest from previous periods will still be excluded.  If it is decided to distribute this income as well, the amount should be calculated and entered in the Other Interest field.

Other income and expenses that are to be included in the distribution can be manually entered.

Standard expenses that are payable to third parties can be entered as a percentage.  These will be deducted from the calculated gross income to get the net amount for distribution.

The distribution can be calculated, and figures amended before a final posting is made.

As part of the process the system will raise a Cashbook Direct Credit batch to pay all investors who have their interest action set to be Direct Credit.

GST may be calculated on the Managers and Trustees calculated values for expenses.

A Distribution Advice Communication may be created as part of the process to advice Unit Fund holders of their distribution details.

Access

  1. Unit Fund | Post Distribution - Investment

Setup

This Tab is used to set up the standing information required to undertake a distribution.  This detail will normally be set up the first time a distribution is run and  so it does not need to be set up again in the future.  It is unlikely the information on this Tab will change very often.

A welcome screen will be presented, Click  to be presented with the Distribution parameters dialog. Change the tab to ‘Setup Details’.

The below dialog will be presented:



Field
Description
Company

[F2] to highlight and  the Company that will be included in this distribution

Currency
[F2] to highlight and   the Currency that will be included in this distribution
Distribution Account Type 1

[F2] to highlight and  the first Variable Loan Account Type whose interest will be included in this distribution

There must be at least one Variable Loan account type selected
Distribution Account Type 2-6[F2] to highlight and  the subsequent Variable Loan Account Types whose interest will be included in this distribution
Allocation Account Type

[F2] to highlight and  the first Unit Fund Account Type that net income will be distributed to

There must be at least one Unit Fund account type selected
Allocation Account Type 2-6[F2] to highlight and  the subsequent Unit Fund Account Types that net income will be distributed to
Account Write Off Transaction Type

[F2] to highlight and  the Transaction Type that is used to write off Variable Loan interest

These transactions can then be identified and used to reduce the amount of interest available for distribution

The total of write off’s can be confirmed for audit purposes by:

Accounts| Print Account Transactions

Select the Transaction Type nominated here and ensure the input date range is the same as the distribution date range specified on the Distribution Parameters Tab
Manager's GST Rate[F2] to highlight and  the GST Rate that is to be applied to the Management Fee when the Distribution is calculated
Trustee's GST Rate

[F2] to highlight and  the GST Rate that is to be applied to the Trustee Expenses when the Distribution is calculated

Mgmt Expenses Gl Account
[F2] to highlight and  the GL Code the Management Expenses will post to on distribution
Mgmt Fee GL Account

[F2] to highlight and  the GL Code the Management Expenses will post to on distribution

Bad Debt Reserve GL Account
[F2] to highlight and  the GL Code the reserve contribution for Bad Debts will post to on distribution
Trustee GL Account

[F2] to highlight and  the GL Code the Trustee expenses will post to on distribution

GL Expense Account
[F2] to highlight and  the GL Expense Contra Code that will be used for the contra posting of the GL journal raised to the above selected GL Codes
Shareholder Reserve GL Account
[F2] to highlight and  the GL Code that will be used to transfer the bad debt reserve from the expense contra account to the shareholders Bad Debt Reserve GL Code
DC Distribution Advice Communication Type
[F2] to highlight and  the Communication Type that will be used to created Distribution Advices to be sent to Unit Fund holders on distribution for those accounts with an interest action of Direct Credit, Cheque or Transfer Account
Distribution Transaction Type
[F2] to highlight and  the Transaction Type that will be used to post the distribution income to each Unit Fund Account
Distribution Bank Account
[F2] to highlight and  the Bank Account from which Direct Credit distributions will be made

A Direct Credit batch will be created against this bank account for all accounts that have an interest action of Direct Credit

This can then be processed in the normal way to pay the Direct Credits
Direct Credit Particulars Reference
Enter a Reference that will appear on the Unit Fund account holder’s bank statement that details what the distribution is for – bank limit of 11 characters

Process

A welcome dialog is presented upon accessing the menu item.


Click  to be presented with the below dialog:



FieldDescription
Distribution Start Date

Enter the Distribution Start Date

Relevant Variable Loan transactions from and including this date will be included in the distribution

This date may be Preset using Date Builder functionality

Distribution End Date

Enter the Distribution End Date

Relevant Variable Loan transactions up to and including this date will be included in the distribution

This date may be Preset using Date Builder functionality
Unit Fund Posting DateEnter the value date for the distribution transactions that will post to the Unit Fund Accounts. 

A Direct Credit cashbook batch for all accounts with an interest Action of Direct Credit will be created as at this date also. 

This date may not be earlier than the Distribution End Date.
Calculated Write Off Amount

Display field only

This is the total of Variable Loan write off as accumulated from transactions defined by the Account Write Off Transaction Type selected into the Set Up Tab
Include Current Ledger AccruedCheck this checkbox if accrued interest on the Current Ledger (default interest) is to be included in the distribution
Include Future Ledger Accrued

Check this checkbox if accrued interest on the Future Ledger is to be included in the distribution

Include Current Ledger Charged

Check this checkbox if the interest earned on the Current Ledger (default interest) is to be included in the distribution

The amount of interest earned is calculated by adding all amounts posted using the Transaction Type specified on the nominated Account Types as the Interest Charged Tran Type – Current for the distribution date range

This can be confirmed for audit purposes by:

Account | Print Account Transactions

Select the Transaction Type nominated as the Interest Charged Tran Type – Current on each account type selected for distribution.  Ensure the input date range is the same as the distribution date range specified above
Include Future Ledger Charged

Check this checkbox if the interest earned on the Future Ledger is to be included in the distribution

The amount of interest earned is calculated by adding all amounts posted using the Transaction Type specified on the nominated Account Types as the Interest Charged Tran Type – Future for the distribution date range

This can be confirmed for audit purposes by:

Account |  Print Account Transactions

Select the transaction type nominated as the Interest Charged Tran Type – Future on each account type selected for distribution

Ensure the input date range is the same as the distribution date range specified above
Interest (Opening Accrued)

Display only field

This is the amount of accrued interest closing from the previous distribution run

An amount will only display if the previous checkboxes for Include Current and Future Ledgers Accrued are checked on
Interest Charged

Display only field

This is the total of the interest charged as posted by the Transaction Types associated with the selected Variable Loan Account Types selected to the Setup Tab

An amount will only display if Include Current and Future Ledger checkboxes are checked
External Interest
Enter an amount here for any interest that has been transacted outside the Variable Loan System that needs to be included in the distribution
Other Interest
Enter an amount here for any other interest that has been transacted outside the Variable Loan System that needs to be included in the distribution
Expenses

Enter an amount here for any Expenses that are to be deducted that are not manager’s expenses

These will be deducted from the distribution
Bad Debts
Enter an amount here for any Bad Debts that are to be excluded from the distribution but which haven’t been written off against loan accounts
Other Manual Adjustments

Enter an amount of any Manual Adjustments that have been made to Variable Loans that will affect the distribution

A negative entry will decrease the amount available for distribution
Interest (Closing Accrued)

Display only field

This is the amount of Accrued Interest for this distribution run

It will represent the interest that is accrued on Variable Loan accounts from the date of their last interest posting to the distribution end date

An amount will only display if the previous checkboxes for Include Current and Future Ledgers Accrued are checked on
Distribution Amount Pre-deductions

Display field only

This is the total available for distribution prior to the deduction of Management, Trustee and Reserve charges
Management Expenses
Enter an amount that is the charge for Management Expenses for the period if applicable
Management Fee %

Enter the Management Fee percentage that is to be deducted from the distribution amount

This calculated amount will post to the Manager’s liability account selected in the Setup tab
Reserve Contribution %

Enter the Reserve Contribution percentage that is to be deducted from the distribution amount

This calculated amount will post to the Bad Debt Reserve Account selected in the Setup tab
Trustee %

Enter the Trustee percentage that is to be deducted from the distribution amount

This calculated amount will post to the Trustee Liability Account selected in the Setup tab

Function Buttons

FieldDescription

This will calculate the average daily balance of each Unit Fund account, the distribution amount and the annual rate

An audit report of these calculations will be automatically displayed

This will:

  1. Post a gross distribution transaction to each Unit Fund account based on the proportion of units each account holder has to the total number of units
  2. Post a withholding tax transaction for the tax on the distribution amount at the rate of withholding tax defined on the Client Details record associated with the Unit Fund account
  3. Update the number of units held on each Unit Fund taking into account the distribution amount less withholding tax
  4. Create a distribution Communication for each Unit Fund account
  5. Create a Direct Credit file for the net amount of the distribution for each Unit Fund account holder set up with an Interest Action of Direct Credit
Print an Audit Report of the distribution calculations and journal entries

Audit Report

The Audit Report will provide details to verify the distribution and show the journal entries that will post to the General Ledger.  On subsequent pages, the average daily unit balance of each Unit Fund account will be printed.  This is used to determine the proportion of the Net Distribution payable to each Unit Fund investor.



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