For reconciliation purposes, FACTS will only consider transactions whose dates fall within the cycle begin and end dates you are reconciling. For purposes of this discussion, assume that the cycle you are reconciling runs from March 1 st to March 31 st . The Transactions mentioned in the warning message are transactions that have Confirm Dates prior to March 1 st .
It is important that you investigate and fix the issue because FACTS allocates the earnings based on the FACTS balance records for each Fund (not GL balances). If there are Transactions with dates prior to the current cycle, FACTS balance records have not been updated and as a result, the current cycle allocations and possibly even prior allocations could be inaccurate.
You need to find the Transactions and determine what action should be taken. Depending on the situation, you might do one or more of the following:
1. Change their dates into the current cycle;
2. Change their dates to the first day of the next cycle;
3. Unpost FACTS;
4. Create adjusting journal entries.
See below for more details for each situation.
Change Their Dates into the Current Cycle
Many times, the Transactions are created from posting routine entries with a date before the current cycle (in this example, perhaps a date in February). Transactions of this type might be Admin Fees, Gift Adjustments, check voids,Transfers, Cash Calls, or from running Asset Rebalancing. For most of these categories, the balances of individual Funds are changing, but the impact to the total Pool is $0. For these you typically just need to push the Confirm Date into the current cycle so the Transactions will be included in the allocations for the current cycle.
Note: When creating routine journal entries that impact FACTS and are dated in the same month for which FACTS has already been posted, you can set a FACTS Confirm Date before posting so you will not run into this issue in the future. Continuing with our example, FACTS has been posted for February. But you calculate Admin Fees after posting FACTS and post them with a February GL Apply Date. You can set March 1 st as the Confirm Date on the entries in the set-up screen for the admin fee entries.
Finding Transactions with a Prior Date
To find the Transactions with a prior date, click on the Transactions tab and change the Sort By to Confirm Date. The oldest Transactions will appear on the top of the data grid. Look at the Transactions to determine what they are and why they are there. Make sure you feel it is alright to change their Confirm Dates to March.
To easily analyze a lot of Transactions at once, click on Reports and run the Transaction Entry Listing . Select the Pool or Invest Account ID along with Confirm Dates from the oldest through the end of February in our example. Then on the Sorting tab sort and subtotal based on Confirm Date or Description, whichever is more helpful for analysis. You can then check each subtotal and/or check the grand total at the bottom. If the subtotal(s) and grand total is $0, Transactions are of the type described above, and from the prior month, it is probably safe to change the Confirm Dates on all the transactions to the first day of the current cycle (March 1 st in our example). Use the utility under File Maintenance called Change Confirm Dates to mass change all the dates at once.
Running the Change Confirm Dates utility:
- Go to FACTS > File Maintenance > Change Confirm Dates.
- Enter a Pool ID in the From and Through fields.
- Enter the new Confirm Date you want for all the selected Transactions.
- Pick which Transactions you want to change by checking the box to either select based on a Confirm Date range or a Transaction Date range, and enter the dates in the From and Through fields.
- Optionally you can select further based on a particular Document Number range or Transaction Type range.
- Click OK and Yes after confirming the selections.
- A message box with a count of the records changed will appear. Click OK to close.
Change the Dates to the First Day of the Next Cycle
There are some instances where the Transactions may need to be changed to the first day of the next cycle. For example, if the checking account is part of the pool, some of the unreconciled Transactions might be outstanding checks. Following our example, the Confirm Dates should be moved to April 1 st and be considered again in the reconciliation of next month's cycle. Another example of Transactions that might remain unreconciled for more than a month might be Transactions associated with bank errors. It's possible it could take multiple cycles before the bank corrects the error.
If you feel that the Transactions should have been included in a prior cycle, you may need to unpost FACTS, re-reconcile (so the missing Transactions are included this time), re-allocate, and re-post. Unposting FACTS is very easy to do since it creates all the reversing journal entries for you. If you need to unpost more than one cycle, you have to unpost each cycle starting with the most recent and work backwards in time. You can unpost multiple cycles within the same year all at once. But there are usually practical limits as to how far back you should unpost. Typically you would not unpost any further back than the last time Fund Statements were sent.
Use the following process to unpost FACTS.
- Select File Maintenance, then select FACTS and then select FACTS Unpost.
- Select the investment pool.
- The cycle defaults to the last posted cycle. Click OK. You will get a message box asking “Are you sure you are ready to unpost cycle X for pool “pool ID”? Click Yes if you want to continue to unpost and click No if you do not want to continue.
- If you clicked yes, you will get a message that Cycle X for pool “pool ID” has been unposted. Click OK.
- The G/L Journal Edit Report Selections from FACTS Unpost will be displayed and will have the apply dates, journal keys, references and journal numbers filled in. Click OK. Click Run Report.
- The G/L Journal Edit Report will be displayed and you can click on Post Journal on the report menu-bar and then click on Run Report. The G/L Journal Posting report will be displayed.
Create Adjusting Journal Entries
In some instances, instead of unposting FACTS, adjusting journal entries can be done to rectify the inaccurate allocations. An example of this might be a Gift adjustment between two Funds in the Pool. The net effect to the Pool is zero, but if one Fund received more earnings than the other, adjusting entries could be made to give the proper Fund the earnings and remove them from the Fund that should not have received them. In this case, the Confirm Date on the Transactions created from the Gift Adjustment should be changed to be included in the current cycle.
Not Sure Which Option to Choose?
If you are unsure whether to unpost FACTS, or some other option would be the best, or if you have other questions regarding this topic, please contact FIMS Support and we can help you decide the best course of action.