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DataBank: Library Fund Management Tips & Tools

LEDGER BALANCES

  • COMMITMENTS Amounts attached to purchase orders that have been approved are recorded in Commitments-Total.  Commitments-Pending records amounts attached to purchase orders that are waiting to be approved.
  • EXPENDITURES Amounts attached to approved invoices appear in Expenditures-Total. Expenditures-Pending records amounts attached to invoices that are waiting to be approved.
  • BALANCES The money that is “in the bank” that will be drawn on to pay for the purchases is in Balances-Cash. Balances-Available is the money left over to use for new purchases after subtracting the Commitments-Total.  The available balance is cash less the commitments total.  The calculation does not include the pending commitments, or the pending expenditures. 

SO, HOW MUCH IS REALLY AVAILABLE? You must take Pending into account. For a more accurate assessment of available funding, add the Commitments-Pending to the Commitments-Total and subtract that figure from Balances-Cash. 

Expenditures-Pending will directly reduce the cash.  This is not as clean a calculation since that amount on invoices will reduce the commitments total once the invoice is approved.  So, in the best of all scenarios, as pending expenditures are approved, the available balance remains little changed.  There are situations in which no commitment is recorded in the purchase order, so that when the pending expenditure is approved, both the cash and the available balance are reduced.

LEDGER BALANCES GRAPHIC DISPLAY

How much is really available to spend? Add Commitments-Pending to Commitments-Total and subtract it from Cash ...
$8125.05 + 211.56 = $8336.61 substracted from $11,532.17 = $3195.56... not the $3407.12 under Available.