What is average daily balance in SAP PSM-FM - Funds Management?

SAP Term: average daily balance

• Component: PSM-FM

• Component Name: Funds Management

• Description: Average amount in an account over a specific period, calculated by totaling the daily end balances for the period and dividing by the number of days in that period.

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• Key Concepts: 
  Average daily balance is a term used in SAP Funds Management (PSM-FM) to refer to the average of the daily balances of a fund over a certain period of time. It is used to calculate the interest rate for a fund and is calculated by taking the sum of all daily balances and dividing it by the number of days in the period. 
  
  How to use it: 
  In SAP Funds Management, average daily balance is used to calculate the interest rate for a fund. To calculate the average daily balance, first enter the start date and end date of the period for which you want to calculate the average daily balance. Then, enter the daily balances for each day in that period. Finally, add up all of the daily balances and divide by the number of days in that period to get the average daily balance. 
  
  Tips & Tricks: 
  When calculating average daily balance, make sure to enter all of the daily balances for each day in the period. If any days are missed, it will affect the accuracy of your calculation. Additionally, make sure to double-check your calculations before submitting them as incorrect calculations can lead to inaccurate interest rates. 
  
  Related Information: 
  For more information on how to use average daily balance in SAP Funds Management, please refer to SAP’s official documentation on Funds Management (PSM-FM). Additionally, there are many online tutorials and videos available that provide step-by-step instructions on how to use this feature.