This article will take you through processing a Fund on Class, taking a best practice approach to minimise the time spent processing a Fund.
We will run you through the following steps;
- Load all Cash Transactions
- Processing Buys & Sells
- Processing Corporate Actions
- Generate Income
- Automatch & Manual Matching
- Transaction Rules
- Processing Ad-hoc Transactions
- Review Exception Report
- Revalue Unlisted Investments
- Year-End Processing
- Close Financial Year
Load all Cash Transactions
Your starting point when processing an SMSF, is to ensure all cash transactions are reconciled and have all the cash transactions entered for the relevant financial year. To enter cash transactions, there are a few approaches:
- Cash Data Feeds It is best practice to have cash data feeds activated for all your cash accounts in the Fund. This will allow cash transactions to automatically feed through from the Data Feeds provider;
- Uploading Transactions via CSV or Copy/Paste If your are yet to activate data feeds, or you require to back-fill transactions, the second-best approach will be to enter transactions in Class via a CSV upload or our Copy/Paste functionality;
- Manual File Loading - Class supports a range of files that can be manually uploaded to Class.
Back-filling Transactions - You might need to back-fill cash transactions for the income year if the feed started during the income year and that particular feed provider does not support history. Refer to our Feeds Overview page for insights to our feeds providers that support history.
Processing Buys & Sells
Secondly, you will need to ensure that all your investment holdings are reconciled for the income year. By reconciled we mean that all the investment purchases and disposals have been entered for that financial year. To record buys or sells in Class, there are a few approaches:
Activating Broker or Wrap Data Feeds - It is best practice to activate broker and wrap data feeds for your funds, where applicable. activating such feeds will automatically feed across buys and sells directly from the feeds provider;
When a data feed is not available
- Manual File Loading - Class supports a range of files that can be manually uploaded to Class;
- Excel Transaction Loader - Portfolio Tab You can use the Excel Transaction Loader to enter buys and sells. This is particularly useful if the fund had actively traded and you have the buys and sells details already in Excel/CSV format, where they can easily be copied and pasted to the loader; and
Manually Entering Buys and Sells - You can manually enter buys and sells, using:
Investment - Buy
Investment - Sell
Processing Corporate Actions
Navigate to Fund Level > Investments > Browse Corporate Actions
After recording the fund's buys and sells, processing Corporate Actions is the next essential step to ensure your holdings accounts are reconciled for the financial year before we look into Generating Income.
Navigate to Fund Level > Transactions > Generate Income
Using the Generate Income function in Class will automatically populate your listed security income, creating dividends, distributions and foreign income based on your unit holdings.
You can Generate Income multiple times if any unit holdings have changed during the year. Examples of this occurring include; forgetting to process a buy/sell or there is a dividend re-investment.
Automatch & Manual Matching
Navigate to Fund Level > Transactions > Match Transactions > Automatch
Use the Automatch function to automatically match-off cash transactions with the respective Business Event. Automatch will only match off transactions based on the total amount and date parameters. Automatch can also automatically match-off cash transfers from one cash account to another.
The Automatch function can only match transactions with a date period of 0 to 7 days. Always review the items being matched and unselect matches where you think it might be incorrect to avoid incorrect matching.
Navigate to Fund Level > Transactions > Match Transactions
After using Automatch function, you might have cash transactions that require manual matching against the respective Business Event. This might occur when you have a cash settlement that takes more than 7 days to be paid/received.
Refer to the Manual Matching article for further guidance.
Navigate to Fund Level > Transactions > Match Transactions
Navigate to Fund Level > Transactions > View Transaction Rules
Set-up Transactions Rules to process re-occurring cash transactions. Transaction Rules are commonly created to process the following:
- Interest Received
- Bank Interest Paid
- Bank Fee
- Administration Fee
- Adviser Fee
- Member Contributions
- Pension Drawdown
- Member Insurance Premium
- Rental Statement
It should be noted, it is highly not recommended to set-up Transaction Rules to process listed security income, such as Dividends & Distributions for ASX listed securities and Managed Funds with an APIR code. The approach is highly inefficient and unreliable, and it is best practice to use Generate Income to process such business events.
Processing Ad-hoc Transactions
Navigate to Fund Level > Transactions > Match Transactions > menu button > Match To New
At this point of processing, you might have a couple of unmatched transactions, such as ASIC fees, ATO payments and other ad-hoc transactions. These can be processed manually in the Match Transaction screen.
Review Exception Report
Navigate to Fund Level > Reports > Exceptions Report
After matching off all the cash transactions for the financial year, view the Exceptions Report. The Exception Report essentially provides a validation of your fund's processing.
The most common validation issue is a reminder to enter Annual Tax Statements for distribution income received by the fund. Refer to the following articles for guidance on Annual Tax Statement processing:
You can have unmatched Business Events relating to the financial year. Class will automatically accrue such income or expenses.
Revalue Unlisted Investments
Navigate to Fund Level > Investments > Browse Holding Accounts
Before you commence year-end processing, you will revalue unlisted investments such as property and unlisted securities held by the Fund. Refer to the following articles for guidance on revaluing unlisted investments:
There is no need to manually revalue listed securities. Class revalues listed securities automatically, as there is a direct feed between IRESS and Class providing daily market prices.
Navigate to Fund Level > Periodic Processing > Period Update
At this point you will run a Period Update, to process the member's profit allocation, revaluation adjustments and tax adjustments. The Period Update is able to automatically process these year-end adjustments, based on the business and cash events created.
Complete a Tax Finalisation after running a Period Update, to generate and validate the Annual Return before sending the funds financials and annual return off to the auditor.
Close Financial Year
Navigate to Fund Level > Periodic Processing > Period Update > select financial year > Close Financial Year
Once the fund is ready to be sent to the auditor it is best practice to Closing the Financial Year to prevent automatic or accidental processing in that financial year.