Identify Bank Settlements as Offsets

In the Manual Matching tab of the Cash Matching workspace, you can identify bank settlements as offsetting entries to indicate to the system that those bank settlements are no longer eligible for automated or manual cash matching. 

About Offset Bank Settlements

If you match a bank settlement that contains very incorrect information, you may later receive an offset bank settlement along with a new corrected bank settlement. The offset bank settlement represents a cancellation from the bank, custodian, or third party, by using an opposing cash flow. When this occurs, you can unmatch the incorrect bank settlement from its corresponding open receivable/payable, if the match already occurred, and then you can match the corrected bank settlement to its corresponding open receivable/payable. The Manual Matching tab still shows the incorrect bank settlement, along with the offset bank settlement. You can identify those bank settlements as offsetting entries to indicate to the system that those bank settlements are no longer eligible for automated or manual cash matching. 

For example, you match the original bank settlement of $100 with a Receipt cash flow to an open receivable/payable that is incorrect. Later you receive an offset bank settlement of $100 with a Disbursement cash flow and a corrected bank settlement of $150 with a Receipt cash flow. In this scenario, after you match the original bank settlement, you then unmatched the original bank settlement thereby returning the open receivable/payable to an open status. You can mark the original bank settlement and the offset bank settlement for $100 as offsetting entries. This prevents Eagle Accounting from attempting to match the original bank settlement for $100 or the offset bank settlement for $100 in the future.

About Identifying Offsets

Eagle Accounting provides several ways for you to identify bank settlements as offsetting entries.

• Offsetting Transfer Option. This method is reversible and has an impact on STAR accounting. You identify a pair of bank settlements as offset entries. When you use this method to mark a bank settlement as an offset entry, STAR accounting processes the bank settlements. Because the bank settlement transactions actually occurred in the market, there is an impact to STAR accounting for record purposes. Accounting entries transfer the cash to the default entity associated with the bank settlement. After you identify a bank settlement as an offset entry, it is no longer available for matching. However, if you identify a bank settlement as an offset entry in error, you have the option to cancel the bank settlement as an offset entry and make it eligible for matching again.

• Offset Option. This method is not reversible and has no impact on STAR Accounting. You can identify one or more bank settlements as an offset entry. The bank settlements then are no longer available for matching. 

• Offsetting Entry Option. This method is not reversible and has no impact on STAR Accounting. You can identify a bank settlement as an offset entry while you perform a manual match. The bank settlement is then no longer available for matching. 

Transfer Offsetting Entries for Bank Settlements

In the Cash Matching workspace's Manual Matching tab, you can select an incorrect bank settlement, along with the incorrect bank settlement that offsets it, identify them as offset entries, and transfer those bank settlements to a default entity such that they have an impact on the STAR accounting system. Marking the bank settlements as offsetting entries indicates that those bank settlements are no longer eligible for automated or manual cash matching. This method of marking offset entries for bank settlements allows you to process the transactions in STAR accounting for record purposes because those transactions actually occurred in the market. The Offsetting Transfer option transfers the cash to the default entity associated with the cash account relationship that applies to the bank settlements. The Offsetting Transfer applies to all accounting bases for the default entity, rather than just the CUST basis.

Using the Offsetting Transfer option create STAR accounting entries, and marking a bank settlement as an offset entry in this manner is reversible. If you make an error when you transfer offsetting entries for bank settlements and you decide you want to make the bank settlement available for cash matching again, you can use the Cancel Offset Entry option in the Matched & Suspended tab to do so. For details, see Cancel Offset Entries for Bank Settlements.

A sample scenario follows. You manually match an open receivable/payable for a $100 sell to an incorrect bank settlement for $120. The bank settlement still has $20 receipt available for matching. You then receive a $20 bank settlement disbursement that offsets the $20 that is still available for matching. You want the STAR accounting system to reflect the $20 amount of the offset.

To transfer offsetting entries for bank settlements:

1. In Accounting Center, in the left navigation pane, click Transactions > Cash > Cash Matching.
   You see the Cash Matching workspace. The Manual Matching tab is active by default.

2. In the Manual Matching tab, search for and select the bank settlements that you want to transfer as offsetting entries.
   You must select at least two offsetting bank settlements. The bank settlements must match based on the following criteria:
   - Asset ID (tag 10)
   - Net Amount Local (tag 50)
   - Cash Category (tag 62)
   - Settlement Currency (tag 63)
   - Cash Account Alias (tag 11698)
   The Offsetting Transfer option does not become available until you select the bank settlements.

3. On the Cash Matching tab, in the Actions group, click Offsetting Transfer.
   You see the Offsetting Transfer panel. This panel, which has the same options as those in the IntraFund Cash Transfer panel, displays the values associated with the bank settlements selected. For example, in the Entity Information section, you see the default entity information filled in for the CUST accounting basis and the security, along with the fields in the Accounting Information and Bank Account Information sections.

4. Under Currency Information, click the Transfer Type list and select one of the following transfer options:
   - Transfer Principal Cash between Cash Accounts
   - Transfer Income Cash between Cash Accounts 

5. Review the remaining information in the Offset Transfer window for the selected bank settlements.

6. Click Submit to transfer the offsetting entries.
   The system submits the settlements to the accounting engine for processing. It processes traded and settlement records for the Default Entity associated with the cash account relationship for the bank settlements. You no longer see the bank settlements in the Cash Matching workspace. 

You can use the Position Viewer tool to view the actual settlements for the transferred cash in STAR accounting. For example, you can select the Cash Position - Different Settlement Currency option to view the cash position for the default entity. In the Settled tab, you can identify the rows for the offset that have an Event Type of IntraFund Cash Transfer, along with a Cash Event Type of RECPT or DISB on the cash account.

Identify Bank Settlements as Offsets

You can select an incorrect bank settlement, along with the incorrect bank settlement that offset it, and identify them as offset entries. Marking the bank settlements as offsetting entries indicates that those bank settlements are no longer eligible for automated or manual cash matching. Using the Offset option creates no entries in Eagle Accounting. You can select one or more bank settlements, and do not have to select records that balance to zero.

To identify bank settlements as offsets:

1. In Accounting Center, in the left navigation pane, click Transactions > Cash > Cash Matching.
   You see the Cash Matching workspace. The Manual Matching tab is active by default.

2. In Cash Matching workspace, click the Manual Matching tab.
   You see open receivables/payables in the upper grid and bank settlements in the lower grid.

3. Search for the incorrect bank settlement that you want to identify, along with the reversing incorrect bank settlement that offsets it.

4. Select the check boxes for the incorrect bank settlement, and for the offsetting incorrect bank settlement.
   You can select one or more bank settlements.

5. On the Cash Matching tab, in the Actions group, click Offset.
   The system does not require that you select an incorrect bank settlement and an offset bank settlement for the same amount. If you do not select two bank settlements that have a Balance of zero, you see a message that states that the amounts are not equal and confirms that you want to continue.

6. If you want to continue, click Yes.
   You see a message confirming the system completed your request. 

7. Click OK.
   You no longer see the bank settlements you marked as offsetting entries in the Manual Matching tab, because those bank settlements are ineligible for matching.

Identify Bank Settlements as Offsetting Entries during a Match

If you match a bank settlement that contains very incorrect information, you may later receive an offset bank settlement along with a new corrected bank settlement. The offset bank settlement represents a cancellation from the bank, custodian, or third party, by using an opposing cash flow. When you manually match the corrected bank settlement with an open receivable/payable, you can identify incorrect bank settlements that offset one another. Marking the bank settlements as offsetting entries indicates that those bank settlements are no longer eligible for automated or manual cash matching. Bank settlements marked as offsets in this manner have no impact upon STAR accounting.

For example, you match the original bank settlement of $100 with a Receipt cash flow to an open receivable/payable that is incorrect. Later you receive an offset bank settlement of $100 with a Disbursement cash flow and a corrected bank settlement of $150 with a Receipt cash flow. In this scenario, after you match the original bank settlement, you then unmatched the original bank settlement thereby returning the open receivable/payable to an open status.

You can then mark the original bank settlement and the offset bank settlement for $100 as offsetting entries at the same time you match the corrected bank settlement for $150 with the open receivable/payable.

To manage offset bank settlements:

1. In Accounting Center, in the left navigation pane, click Transactions > Cash > Cash Matching.
   You see the Cash Matching workspace. The Manual Matching tab is active by default.

2. Click the Matched & Suspended tab.

3. Search for the matched bank settlement related to the offset bank settlement.

4. If you previously matched the original incorrect bank settlement, unmatch the original incorrect matched bank settlement. Otherwise, continue to the next step.
   The incorrect matched bank settlement returns to an unmatched status, the settled receivables/payables return to an open status, the settled transactions created as a result of the match are cancelled in STAR accounting, and the ledger entries for the settlement are reversed in the non custody basis.

5. In Cash Matching workspace, click the Manual Matching tab.
   You see open receivables/payables in the upper grid and bank settlements in the lower grid.

6. Search for the open receivables/payables and bank settlements that you want to match, along with the offset bank settlements.

7. Select the check box for each open receivable/payable you want to match.

8. Select the check boxes for the corrected bank settlement you want to match, for the incorrect bank settlement, and for the offsetting incorrect bank settlement.

9. On the Cash Matching tab, in the Actions group, click Match.
   You see the Match Records dialog box. In the upper pane, you see the selected open receivables/payables along with the Remaining Receivable/Payable amount. In the lower pane, you see the selected bank settlements along with the Balance amount.

10. Select the Offsetting Entry check box for the incorrect bank settlement and for the reversing incorrect bank settlement that offsets it.
    Do not identify the corrected bank settlement that you plan to match as an offset entry. When you identify the offsetting entries, the total and Balance amount changes.

11. If you want to write off the difference to cash breakage, select the Write to Breakage check box.
    If the balance is not zero but you want to fully settle the bank settlement, you can write off the remaining unsettled amount to the account determined by the entity's cash breakage election. Otherwise, if the balance is not zero and you want to partially settle the bank settlement, do not select the Write to Breakage option.

12. Click the Match button.
    The system submits the settlements associated with the corrected bank settlement to the accounting engine for processing. You no longer see the bank settlements and open receivable/payables that you fully matched in the workspace. You no longer see the bank settlements you marked as offsetting entries in the Manual Matching tab, because those bank settlements are ineligible for matching.