In this guide, we show the differences in configuration when using either Fund Allocation or Retained Earnings as part of the Financial Year End carry forward process.
Related guides:
To begin, go to Modules > Finance > Finance Home Page > Maintenance > Global Configuration.
The checkbox Use Retained Earnings will be configured Once. It Cannot be changed.
Fund Allocation
If the Use Retained Earnings checkbox is not checked, the system will use Fund Allocation. If using Fund Allocation, the following will apply:
- Fund Allocation menu option will be displayed (Modules > Finance > Budgeting)
- Fund Allocation field will be displayed (Modules > Finance > Budgeting > Cost Centre Allocation)
- Permissions for Fund Allocations will be displayed (Config > Setup > Roles & Permissions > Finance)
- It will not be possible to create Retained Earnings Ledger Type Ledger Codes (Modules > Finance > Maintenance > Ledger Groups and Codes)
- Carry Forward will transfer between Fund Codes instead of Retained Earnings for income and expenditure
Retained Earnings
If the Use Retained Earnings checkbox is checked, the system will use Retained Earnings, and as a result Fund Allocation will not be available. If using Retained Earnings the following will apply:
- Fund Allocation menu option will be hidden (Modules > Finance > Budgeting)
- Fund Allocation field will be hidden (Modules > Finance > Budgeting > Cost Centre Allocation)
- Permissions for Fund Allocations will be hidden (Config > Setup > Roles & Permissions > Finance)
- It will be possible to create Retained Earnings Ledger Type Ledger Codes (Modules > Finance > Maintenance > Ledger Groups and Codes)
- Carry Forward will transfer between Retained Earnings instead of Fund Codes for income and expenditure
Note: If Fund Allocation is used, the Year End Process will look at the Balance Carried Forward from the last Financial Year for each Fund Code, combine all the Income and Expenditure for the Financial Year for that Fund Code, and then post the surplus or deficit for each Fund Code to the next Financial Year in the Opening Balance Journal. Any balance in Retained Earnings will automatically be carried forward against the related Fund Code, so no action is required if there is a balance against the Retained Earnings Ledger Code(s) that are going to be using Fund Allocation.