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Public sector organizations often own a large amount of cash that they keep in saving accounts and/or invest in the financial market (for example, bank deposits/securities). For optimized investment, these funds are typically pooled and invested by one fund (Treasurer or Treasury Fund).
Interest earned by the Treasury Fund and other gains/losses from investments can be allocated to its origin.
Incoming and outgoing cash is also pooled on the Treasury Fund and the individual fund's share is reflected in equity in pooled cash.
Each participating fund's equity in pooled cash balance is therefore calculated on a daily basis and the interest earned is then allocated based on the average daily balance (ADB) portion of the participating funds on a monthly basis.
Interest Apportionment Apps
The figure, Interest Apportionment Apps, gives an overview of the apps available to perform interest apportionment.
Rules for interest allocation are maintained by the GL_Accountant_PSM_US role. This is done with the Manage Interest Apportionment SAP Fiori app.
Periodic interest allocation can be scheduled automatically and the results can be displayed in a job log. The Schedule General Ledger Jobs for Fund Accounting tile contains the Template for Interest Apportionment.
Manage Interest Apportionment App
A Pool ID is used to maintain information that is needed to determine the following:
- General Information and, in particular, which fund is used as the Pooled Fund within a company code, along with some administrative data.
- The Interest Accounts that need to be allocated.
- The Participating Account, which is where each fund's share in Equity In Pooled Cash is posted.
- The Participating Account Assignments, which are the basis for the calculation of the ADB and the percentage share in daily balance.
- For each participating account assignment combination, it is possible to maintain different/deviating destination account assignments (Fund, Grant). This is useful if, for example a Grant should not receive any interest apportionment, but rather another Grant (or Grant ‘NRG’) should receive interest instead.
- For each participating account assignment combination, it is also necessary to maintain a destination Cost Center and, optionally, a destination WBS element.
Note
In the current definition/content, only one Treasury Fund is configured. Therefore, it makes sense to create only one pool ID per company code.The Pool ID is used in the Job Template for Interest Apportionment and contains all the rules for how the apportionment must be performed.
Schedule General Ledger Jobs App with Job Template for Interest Apportionment
It is possible to schedule the calculation and posting of interest apportionment on a monthly basis.
The template can be run automatically each month as a background job by using a recurrence pattern and defining a dynamic date (for example, the second day of each month for the prior month).
In the Parameters step, the user specifies the Pool ID (which contains the definition of rules) and general, posting, and control parameters. The template can be run in Test Run mode multiple times for a particular month but only once in Update mode.
Note
The template is in Update mode when the Test Run checkbox is not selected.Provided there are interest postings and balances are posted for participating account assignments, when the Test Run checkbox is deselected, an interest posting document is created. This interest posting document offsets the Treasury Fund interest posting and apportions the interest to the participating account assignments based on the ADB.
Note
If for some reason the posting run for a month must be repeated, a reversal run must first be started before a new posting for the same period can be scheduled again.After scheduling the job template, the user reviews the job(s) scheduled and the results of the interest apportionment run.
The following types of reports/result lists are available for the specific application job selected:
- Summary
- Detail
- Posting Result
- Job Log
An example of results is shown in the figure, Daily Balance by Fund Report.
The application log result report shows the following information for each participating fund/grant:
- Daily balance (balance day 1-31)
- Sum of daily balances
- Percentage of each fund/grant combination in the sum of daily balance
- Interest apportionment amount for each combination that will subsequently be posted to allocate the interest from the pooled fund to participating/destination fund.