The Custom Template is the primary template to use for a simple Pro-Rata calculation and may be used for other one-off calculations that are not covered by other templates, which is rare.
Pre-Conditions For Use:
The screenshot below shows a typical pro-rata calculation template and the six (6) mandatory fields that must be input:
Amount/Percent: Input the % or a whole dollar amount you are distributing or withholding of the available cash to distribute. This is typically a % for pro-rata calculations and this input should not be confused for the actual total dollars in your batch amount
Percent / Dollar drop-down: Select the applicable value, typically Percent
Source of cash to apply the preceding variables to:
- Remaining Distribution: the amount left to distribute after any prior rules have been completed
- Remaining Capital Contribution: (Total Invested Amount – Return of Capital to Date)
- Preferred Return: the amount of any accrued Preferred Returns outstanding
- Amount to Meet Target IRR: the amount needed to reach a pre-determined IRR – this should generally be covered under the IRR Template
- Class(es): Select the class or classes that you want to distribute funds to. If you pick multiple classes, the money will be distributed based on each investor’s ownership in the Entity, not their respective class.
Distribution Allocation Method: this will tell the system how to allocate the distribution amount between the investors. Choose from:
- Pro-rata by Ownership: the amount distributed will be allocated according to each investor’s ownership percentage
- Prorata by Unpaid Preferred Return: the amount distributed will be allocated according to each investor’s percentage of the total amount of unpaid preferred return. For example, if you are distributing $50,000 but $100,000 of preferred return is accrued total to all investors and John Smith has accrued $1000 (1%), he will be paid 1% of the total distribution amount, or $500. *must have a preferred return rate and rule configured.
- Equal Distributions: if everyone receives the exact same amount (one off)
- Total Amount: only to be used if there is only one investor, as it will allocate the total amount of the distribution to each investor.
Distribution Sub-Type: select the bucket that you want this cash allocated to. Typically, Excess Cash for a simple pro-rata distribution
If compounding will be used in the custom template, the bottom section of the template can be filled out. If not, the bottom section can be disregarded.