thewealthworks Customer Support Portal

Introduction

Bank interest can be calculated for either an individual client, or a group of clients. The two options use the same settings and calculations. Interest can be calculated based on interest rates or by apportioning a sum of money to the clients, using the interest rate calculation to apportion the interest.

Setting up bank interest calculation the first time

There are three stages required for setting up this part of Troika:

• Setting up the bank base rates,
• Setting up the interest tiers, and
• Setting up the interest details for each client's bank account to be included in the calculations.

Adding the bank base rates to the database

From the Utilities module, select the Database tab and then menu option Bank Base Rates.

In Troika releases prior to 2.09.022 Bank Base Rates was located in the Wealth Management module, Global tab.

To add a new rate, click the New button. Enter the Date From date as the date which the rate being entered is to be effective from, in the format dd/mm/yy. Enter the interest rate in the format n%. Then enter the tax rate to be applied in the format nn%.

Click the Save button to save the changes.

Click the Cancel button to exit without saving.

In the event you need to delete an existing record, click in the grey box immediately to the left of the record, so the box goes from grey to black. Click the Delete button on the keyboard.

Once complete, click Close to exit.

Setting up and maintaining the interest tiers

From the Utilities module, select the Database tab and then menu option Bank Interest Tiers.

In Troika releases prior to 2.09.022 Bank Interest Tiers was located in the Wealth Management module, Global tab.

Two tiers can be set up for income and capital bank accounts. Select the tier (1 or 2) and capital or income by clicking on the radio selection buttons at the top of the menu.

Click anywhere under the ‘From’ heading and then enter the amount from which the adjustment to the base rate will apply. In the example shown, with a base rate of 5%, amount from 0-49,999.99 will earn at 2.65% and balances of 50,000.00 and above will earn at a rate of 4%.

It should be noted that the tiers can be overridden on a client by client basis, if required, and that the treatment of the different rate bands can be modified to work on a stratified basis (2.35% on the first 49,999.99 and 4% on the balance) or a threshold basis, (balances up to 49,999.99 earn at 2.35% and once over the threshold the whole balance earns at 4%).

Applying interest details to each client's bank account

A fund nominal account code with the type ‘Bank’ selected can have bank interest calculated on its balances.

From the Wealth Management module, select the Client tab and then menu option Fund Nominal Codes.

Select an account where the type is set to Bank. An additional Interest button will be displayed. Click the Interest button to access the bank interest details screen.

Starting with the Interest Calculation options:

• Select the Interval period from the list.
• Enter the Frequency. The option for Day in Month must be set for the 28th or earlier.
• Enter the Date Last Interest To. The next calculation will start on the following day and will run to a date defined by the Interval and Frequency settings.
• Set the Calculation Basis. This can be either Threshold or Stratified. See the note above on interest tiers.
• Select to use one of the global tiers by checking the option buttons or leave it set an over-ride and enter tiers specific to this client and this account.
• If interest is to be paid without deduction of tax, click the Interest Paid Gross box.
• From the drop-down lists choose the nominal ledger codes to be used when entering the transactions:
  • Analysis Codes – to record the gross amount of the interest received or charged.
  • Tax Code – to record the tax deducted from the gross interest, if any. If an entry is made for overdraft interest you be asked to confirm that it can be set off.
  • Bank Code – the account to which the interest is added, it does not need to be the account that earned the interest.

Within Troika it is possible that a client may have several bank accounts set up, and several funds. At the top of the screen the option Merge With allows one account to be chosen as a main account. When calculating the interest, the system will calculate the total balance on all the merged accounts and use this to decide on the appropriate interest rate tier to be applied. The All Funds check box works in a similar way but merges the balances across funds as well as accounts. When an account is merged, the subsidiary accounts options become 'greyed' out and cannot be changed as the main account settings take precedence.

The ‘book’ symbol button will show details of which accounts are merged. The Clone button will allow the copying of details set up on one account to be copied to a different account. On the previous screen the button Clone Banks will copy details from another client. When the interest details have been added, the actual calculations can be carried out, either for an individual client or for a group of clients.

Bank Interest Calculation - a single client

From the Wealth Management module, select the Client tab and then menu option Bank Interest - Calculation.

In the event a previous calculation has been done, but not finalised, a message will be displayed:

“There are unposted interest transactions remaining from a previous calculation run – do you wish to review them?”

Click Yes to review the previous calculation or No to start a new calculation.

To enter a new calculation, amend the following:

• Date to calculate to. The system will calculate interest for the next period that finishes before the Date to calculate to.
• Date for postings. The date that will be used to post the interest transactions, if the calculations are accepted and posted. Note this will also be the value date from which compound interest will be calculated.
• Amount to Apportion. Instead of calculating interest due, an amount of interest to be apportioned across the selected clients can be entered. See the note at the beginning of this document.
• Select Accounts to Process/Select All Accounts. Click either an individual account, or click a selection of accounts, whilst holding the Control key down. Selecting an account that is merged will include all the merged accounts in the calculation. If an account is selected that is part of a global client group then that Group will become highlighted. A new box will also be displayed, Select Account to Post in Group. Enter the nominal account in the group client to which the interest should be posted.
• Interest Charge Apportioned. Click to tick this box if the interest calculated on merged accounts should be added to the individual accounts and not entered as a total figure in the main account.
• Checking the Ignore frequencies option will ignore the interest intervals set on the selected nominal accounts and should be used where you want to update a specific client outside your usual bank interest intervals.

Click Run to calculate the interest due in accordance with the selected settings.

The bank interest Reports screen will then be displayed showing the payments due, along with a detailed or summary report. Select the required report and click button to preview or print the report. It is recommended that the report is reviewed and a copy kept before posting.

Click Post to create the transactions and enter them to the individual clients.

The system will post transactions using a standard narrative similar to “Net Interest paid for the period 01 Jan 2018 to 31 Mar 2018”. Click in the Override Detail box and enter your preferred text, if required. An entry in the Minimum box will suppress interest payments below that amount.

The Batches button will display a list of interest calculations already posted to the Troika database. Click on the batch to highlight the interest record and the full details will be displayed. Click the Undo Batch button to delete the postings.

Bank Interest Calculation - groups or all clients

From the Wealth Management module, select the Global tab and then menu option Bank Interest - Calculation.

In the event a previous calculation has been done, but not finalised, a message will be displayed:

“There are unposted interest transactions remaining from a previous calculation run – do you wish to review them?”

Click Yes to review the previous calculation or No to start a new calculation.

The options and entries are exactly the same as those for the individual client calculation, as explained above, with two additional options.

It should be remembered that this operation will affect all or a group of clients. If using the Global Banking options or Nominee Group settings, it is essential that only one global bank is processed at a time.

• No Selections Required. If this box is checked, then the accounts and groups section will not be available and all accounts for all clients are included in the calculation.
• Due Dates. This will display a screen which lists details of all accounts set up to calculate interest together with the next due date.  If an account is selected on the previous screen then this list will be restricted to details for the account or accounts.

Selecting the Edit button will open the Bank Interest Details screen described in the set-up section above.