Some campuses structure organization accounts so that they roll over from year to year, while others operate as an annual or term-based allocation that is sacrificed if not fully spent. Engage’s Organization Accounting tool can support either method or both depending how you as a community administrator use the transaction functionality.
When Should I Zero Out An Account?
If an account is rolling over with no changes, there is no reason to zero out the account. As you complete transactions for payment requests over the course of the year, the balance will adjust accordingly, leaving only the remaining amount for the next term.
Therefore, typical fundraising organization accounts generally do not need to be zeroed out. This can also be the case for accounts that do operate using an allocation but allow leftover balance to be rolled over, even if that allocation amount has changed. In this case, you can simply process a deposit or allocation into the account at the beginning the year and you are all set!
If the account does not roll over from term to term or year to year, then you will want to zero out the account in between years or terms. You may also want to zero out accounts that have some kind of error, e.g. if an incorrect budget amount was imported previously.
What Do I Need to Do Before Zeroing Out an Account?
Before zeroing out an account, review your campus’ customized Finance Categories and Finance Types. When you create a transaction to zero out an account, you will need to tie it to both a category and a type. For clean reporting, we recommend creating both a category and a type for these transactions.Although type typically refers to the mechanism of the transaction (check, p-card, petty cash) and category typically refers to the content or purpose of the transaction (equipment, catering, charitable donation), in this instance it is often not necessary to document type and category differently. Some campuses may accomplish this with an overall “Administrative” type or categories, while others use a more specific “Zeroing Out” type and category.
Before zeroing out accounts, you should also take care of any pending requests and encumbered funds. We recommend approving and completing or denying all active purchase requests. If you need to keep encumbrances on the account for any reason, talk to your consultant about how to tweak this process to meet your needs.
Zeroing out an account will not erase your transaction or request history, so there is no need to pull specific reports before beginning a zeroing out process for the sake of record keeping.
Zeroing Out Accounts
Zeroing Out Single Accounts
If you only need to zero out a handful of accounts, you can accomplish this quickly on an account-by-account basis. Use this method if you simply need to correct an error.
Step 1: Navigate to the account in the Finance tool and determine the account balance. You can do this by going to the Admin view, selecting the Finance dropdown, Accounts, and then selecting the account in question.
Take note of the account balance for that account. You will be using this number momentarily. Remember that you should not have encumbrances on this account. All pending requests should be approved or denied before beginning this process.
Step 2: Create an account balance of zero by clicking the Transactions tab and choosing either “Create Payment” or “Create Transfer.”
If you would like to completely remove this money, eradicating it from your records, choose “Payment.” If you would like to redistribute this money, for example by moving it back into the parent account, choose “Transfer.” In either case, the amount of the transaction should reflect the balance of account you recorded in Step 1. Be sure to include a corresponding finance category and/or type to help students reviewing the account understand what happened to that money. If correcting an error, you may also want to include a note in the memo field.
Upon completion of this step, you should see an account balance of zero.
(Optional) Step 3: Allocate funds into the account by navigating back to the account and creating a new transaction. Choose either the “Deposit” function (to manifest funds out of thin air – for example, to represent a donation or fundraised amount for the group, or alternatively, if not using a paper trail from the parent account) or “Allocation” function (to document disbursement from the parent account).
If you are attempting to import that organization’s SGA disbursement for the year, our allocation transaction might look a little bit like the above. Now that the account has been freshly zeroed out, the allocation gives the organization their correct balance for the year. The organization will still be able to see their past transaction and request history for transition records to help officers understand the kind of expenses they can anticipate and plan for in the term ahead.
Zeroing Out Accounts in Bulk
If you need to zero out many or even all accounts, you can use a transaction import to expedite your process.
Step 1: Gain a list of your current account balances. Once you have approved or denied all of your pending requests, it’s time to turn over to the reports area of the site. Navigate to Admin, the Configure dropdown and select Reports. Select the Financial Account List report and run it.
You will need several columns of this report for the steps ahead, specifically External ID and Balance. You will only need these fields for the accounts you want to zero out, so be sure to filter out and/or remove accounts that do not need to be zeroed out.
Before proceeding, review the account balances of each account you will zero out. Are any account balances negative? If so, you will want to resolve these accounts separately, determining if those accounts are going to be forgiven for their debt or if their account allocation will be reduced by the amount of the debt.
If the latter, you can skip the zeroing out step for the account entirely and simply allocate or deposit into the account like normal to create a new balance. If you are forgiving the debt, you will most likely want to process two separate payments. The first payment or allocation should be in the amount the balance is currently negative to offset it, and can be recorded with a memo such as “debt forgiveness” to distinguish it from a typical allocation. This will zero out the account balance. The second can be in the same typical allocation or payment format.
Step 2: Prepare a transaction import. In order to zero out your accounts, you’ll want to use a transaction import to move the funds out of the account. You will not be able to process the “Transfer” transaction using the bulk transaction import option, so you may later choose to also process a deposit into parent accounts to reflect their increased balance.
Navigate to Admin, select the Finance dropdown, and then choose Transaction Import to start preparing your import file. You may also want to reference our transaction import article for additional detail on preparing this .csv file.
Use the “External Account ID” and “Amount” field from the Financial Account List. Your fields should follow these formats:
External Transaction ID - These can be made up numbers if you do not have a specific external transaction ID to refer to, but each must be unique from any other transaction ID in the organization accounting module.
External Account ID - Pulled from the Financial Account List report
Amount - Reference the report above to determine each account balance. Enter the negative amount of that amount – for example, if the organization you are zeroing out currently has $452.00, you would enter “-452” in this field. Note that this field cannot be formatted in any way and must have the negative sign.
Category – Use the category you determined for this purpose before starting the zeroing out process.
Type - Use the type you determined for this purpose before starting the zeroing out process.
Memo – You can leave this blank
Payee – You will type the name of the parent organization for this account
**Note that all fields are required except "Memo."
When you are done, you can upload the file and click “Import.” All balances included will zero out.
(Optional) Step 3: Allocate funds into the account. You can also use a second transaction import to allocate new balances into each account. It may be easiest to start with your last transaction import file and replace the “amount” column with positive balances of the new allocation.