When you think of a transaction, the impression is probably of one amount with one destination: a single transaction. The application, however, also allows you to create a split transaction for a PPD or CCD category, a transaction with multiple entries that go to different accounts and equal the total, or set, amount. For example, a payroll transaction may be split to send a certain amount to a savings account and the balance to a checking account. Much like single transactions, split transactions can be added to, edited in, or deleted from the transaction list, in single edit mode or Quick Edit mode. Adding split transactions in Quick Edit mode differs slightly, though, since you create the split transaction in a pop-up window rather than directly in the "worksheet."
Note: Entries that are routed to separate accounts in split transactions are seen as individual transactions when the application searches for suspicious transactions. For example, if a receiver who is part of a split entry has never been processed through the application, that entry will trigger the suspicious flag (if enabled by your FI).
To create the entries for a split transaction, the amounts may be determined by exact amount or by percentage. You designate which type of transaction to use when you complete the Transaction Detail information. Then, individual entries must be set up in the Accounts section, including any override information. If the amount is variable, you may want to make one of the entries for the "Remaining Balance" so that you don't have to edit the amount each time. For instance, an employee wants to split her total pay of $500, putting $100 into an IRA, $50 into a savings account, and $350 into a checking account. These three smaller transactions total the set amount of $500. In this example, the transactions within the set are based on fixed dollar amounts. If the set amount varies, you could set up the first two specific entries ($100 to the IRA and $50 to the savings account) and then create the third entry for the Remaining Balance. You may, however, choose to base the transaction on percentages of the total amount. Continuing with our example, the employee may want 20% of her total pay deposited into an IRA, 10% into a savings account, and 70% into a checking account. Basing the set on percentages relieves you of changing individual transaction amounts when the employee’s pay increases or decreases.
If you choose to base the transaction upon amounts and the amount happens to vary, the original amount may be less than the sum of the individual entries. If the original amount is less than the sum of the transactions, this creates an underflow. If the transaction’s Allow Underflow field is set to Yes, the transactions within the set will be filled according to their respective position in the Accounts list. The first entry will be filled first and so on. Lower priority transactions may fall short of their intended amounts. If Allow Underflow is set to No, the application will not save the transaction until the Amount or Allow Underflow field is adjusted appropriately. You can easily handle the inverse situation, an "overflow," by creating a Remaining Balance entry as the last entry in the list.
In addition to the type of transaction, you must select the Split Type. The options are as follows:
Net Credit - A split transaction containing credit entries only.
Net Debit - A split transaction containing debit entries only.
Net Zero - A split transaction containing offsetting credit and debit entries. Net zero split transactions are used to sweep funds from one account into another, such as for tax payments.