Understanding Account Analysis

With Account Analysis, the credit union tracks and analyzes all potential services used by a member even though they may or may not be currently charged for the activity. Account Analysis calculates a suggested balance to be maintained while offsetting fees with an Earnings Credit Allowance (ECA).

Teller Administration is required to automatically capture deposited item counts.

An ECA is based on an earning credit rate that is defined by the credit union (normally tied to the US Treasury Bill rate). The ECA is used to offset incurred expenses that normally would be charged at event time. All services used by the member are tracked and accumulated until the end of the month. Each service or activity has a unit price associated with it and a total costs for the service is determined at month-end. Account Analysis compares the earnings credit allowance against the total costs of services incurred to determine if fees will be assessed. If the ECA exceeds the total costs of services, the member is not charged for any services. This is the benefit of an earnings credit allowance. The higher the balances maintained, the greater the earnings credit allowance. The following formula explains how an earnings credit is calculated.

AVERAGE COLLECTED BALANCE = AVERAGE LEDGER BALANCE - CHECK HOLDS

RESERVE REQUIREMENT = AVERAGE COLLECTED BALANCE * RESERVE REQUIREMENT

INVESTABLE BALANCE = AVERAGE COLLECTED BALANCE - RESERVE RATE

ANNUAL EARNINGS CREDIT = INVESTABLE BALANCE * EARNINGS RATE

EARNINGS CREDIT PER DAY = ANNUAL EARNINGS CREDIT / 365 (366 IF LEAP YEAR)

EARNINGS CREDIT = EARNINGS CREDIT PER DAY * 31 (28, 29 ,30)

Tracking records are created for all system-generated pricing codes for all of a member’s share drafts regardless of whether the pricing code is defined on the Account Analysis Pricing Plan Information window for the member’s plan, and regardless of whether the share draft is marked for service tracking on the Account Analysis dialog box. Any exceptions to this are noted in the specific pricing code details.

All tracking records created for members on Account Analysis are displayed on the Account Analysis Preliminary Detail Report 898; however, only the pricing codes set up on the member’s Account Analysis plan, for the share types included for balance consideration, are considered in the final month-end Account Analysis figures reported on the Combined Analysis Detail grid. The Account Analysis Preliminary Combined Report 899 lists the pricing codes defined on a member’s Account Analysis plan, code usage counts, unit price, costs incurred, and required balances for only the share types that are included for balance consideration.

Tracking records will not appear on the Combined Analysis Detail grid or on either preliminary report if no count or activity has been incurred for the pricing code. Tracking records will appear on the Combined Analysis Detail grid and on the preliminary reports for those pricing codes where activity occurred but the Account Analysis plan fee is 0.00, resulting in a cost of 0.00. If an Account Analysis officer changes the Quantity field to 0 (zero), or the cost to 0.00 for the amount pricing codes, on the Combined Analysis Detail grid, the records will remain on the Combined Analysis Detail grid, but will not appear on the final Account Analysis Statement or on any 899 Report reruns. The Account Analysis officer can add a pricing code to the Combined Analysis Detail grid for a member as long as the code exists in the member’s month-end plan.

Tracking records for most activity appear on the Account Analysis dialog box the next day, and tracking records for some pricing codes are available real-time.

If a member's Account Analysis is set up with a soft dollar or flat fee charge type, the member will not be charged any automated fees (Transaction Fee dialog box) at the time the activity occurred for any included share draft accounts listed on the Account Analysis dialog box. Fees are postponed for consideration in the overall analysis charge at month-end.

If your credit union uses Flexible Fees, you should analyze your Flexible Fee program and make any necessary changes before activating Account Analysis. For example, your credit union may decide that Flexible Fees will not be charged for those members on Account Analysis for any of the member share draft accounts.

Relationship Pricing and Account Analysis

Relationship Pricing is generally recommended for individual member accounts, while Account Analysis is recommended for business accounts. Normally, you will use one or the other, but there may be occasions when a member account is setup for both Relationship Pricing and Account Analysis. If a member’s Account Analysis is set up with a soft dollar or flat fee charge type, Portico will not use Relationship Pricing to provide discounted fees or free items. The standard fees will be tracked to provided an Account Analysis benefit. If a member’s Account Analysis is set up with a hard dollar charge type, Portico will use Relationship Pricing to provide discounted fees and free items.