Average NET Collected Balance (3/14)

Account Analysis consists of balances and fees which comprise a basic math calculation. There are 14 balances that I refer to as "Remember the Math". I will discuss all 14 in 14 different posts.

Average NET Collected Balance

This balance may be pretty straightforward since its value is computed as Average Net Ledger Balance less Average Float Balance.
  
    Avg NET Ledger Balance
less         Avg Float Balance
Avg NET Collected Balance

The Average Net Collected Balance is the sum of the daily collected balance over the number of days in the period.  This is the net balance because it doesn't include any pending yet-to-clear transactions so it's an accurate reflection of the account's available balance. 

What is not included in the computation above is Balance Adjustment Prior Period Ledger. This balance, as its name states, is for any adjustments made to your ledger balance from the prior period. Since most adjustments from prior periods are sent during the current period, this balance will fall between the Avg Net Ledger and the Avg Float.

        Avg NET Ledger Balance
+/-- Balance Adj Prior Period Ledger
less   Avg Float Balance                         
       Avg NET Collected Balance

The balance in red, as with all adjustments, may not be on an account statement from a prior period so this balance may be zero if it is sent at all. If sent as a non-zero value, this balance may be either a negative or positive value which determines its calculation in the above equation.

The important thing is know about the Avg Net Collected Balance is that some financial institutions may use this balance to calculate your account's Earnings Allowance.  Suddenly, this simple balance becomes very important to watch out for.

Happy Analyzing!