Hello ACCOUNTS program advisors. I’m having a discussion with a new user, who is switching to ACCOUNTS from the program Aplos. Aplos does one thing that ACCOUNTS does not do, which is track which amounts in each asset account (like a bank account or investment account) belongs to each fund. The user is having trouble seeing how he can do without that feature, seeing as how ACCOUNTS does not do that at all.
To be clear, this is a situation where the user does not have separate bank accounts for each fund. I know some of you may do that, but as I have discussed with some of you before, I see no real need for that.
My view is that in ACCOUNTS, you know two relevant things: how much total is in each asset account, and what each fund’s current (implicit) balance is. As you may recall, what we call the implicit balance is what shows up as the current fund balance on a Balance Sheet, or Fund Income Statement.
The user is concerned about having an expense that needs to come from a fund, that might exceed the amount of money in that fund in his bank account, even though there is enough in an investment amount to cover it. However, the bank account total is sufficient for the expense.
My argument is, it just doesn’t matter. In my not so humble opinion, there are only two questions to be asked (relevant to the accounting, at least) about an upcoming approved expense that will be from a specific fund. First, is there enough in that fund’s balance. Second, is there enough cash on hand in the bank.
If there’s not enough in the fund balance, you either can’t spend the money, or you put the fund into a negative balance, or you get approval for an inter-fund transfer (which may not require actually moving any money around in bank accounts, unless you keep separate bank accounts for each fund) to cover it.
If there’s not enough in the cash on hand in the bank, you need to cash in some investments (or wait for them to come due so their funds are available), get that money into the bank, and then you will have enough.
But I just can’t see how any questions of which funds’ income made up the current bank and investment account balances needs to come into this (or any other) question.
Can any of you think of anything I’m missing here, or alternatively back me up from your experience? Thank you in advance for any comments.