Beyond the Numbers Blog

A Real-Time General Ledger for a Real-Time Investment Management World

Posted on February 28th, 2019

A general ledger is the heart of any accounting system. It receives and pumps out information that feeds all financial accounting, investment and reporting activities. With accurate, real-time financial data readily available, analysis and investment decisions can be made based on current, not past information.

Unfortunately, many family offices and other firms do not have ready access to current, aggregated information across all assets and entities. Waiting for month end or period close to get a clear financial picture for the preceding month is not unusual. But that means your firm is basing investment and allocation decisions on data for the month before last. The potential for a poor decision on your next transaction rises daily as your financials age.

What’s more, the consolidated rear-looking reports prepared for clients may not be structured to reflect a specific period in time, a particular entity or present the information in a way that is most helpful to each family member.

It’s a real, real, real-time world out there

Immediate, on-demand access to consolidated, up-to-date information is no longer an option, it’s a necessity for any modern family office and essential for insightful decision-making.

According to a recent article in Forbes, The Top Ten Trends That Will Affect Family Offices in 2019 and Beyond, “Efficient decision-making will become a crucial driver of performance going forward. This will require improved analysis and reporting models and tools that provide an at-a-glance, yet dynamic, view of business health.” In other words, a flexible system with a real-time general ledger and consolidated data for analysis and reporting is key.

A real-time general ledger provides readily available financials by automating and performing all the transactions and (un)realized gain/loss calculations upon entry, the instant you have updated data. It lets you know exactly where you are financially, both in terms of your current position and your future commitments, so you can make better financial decisions right now.

Automated download and integration with outside market pricing data sources, custodians and brokers vastly improves the speed with which data is collected, collated, executed and presented. Automation not only saves time by reducing manual input, but improves accuracy and efficiency of the office.

For fund administrators, getting more accurate reporting more quickly is a distinct competitive advantage. For asset managers, an up-to-date picture of the portfolio and financials available 24/7 allows more focused and active investment decisions. With fewer systems and more automated processes, time is shifted from simply collecting and collating data to developing more insightful reporting and spending more time on client relationships.

Protecting wealth

Like much of the financial services sector, asset managers are being subject to increasing levels of regulatory oversight, public scrutiny and disclosure. To meet these demands, firms need improved systems that deliver higher standards of corporate governance, financial management and investor and regulatory reporting. However, even for unregulated sectors of the investment industry, like family offices, transparency and sound financial management are critical.

The evidence of how quickly family wealth dissipates, with over 90% gone by the third generation, indicates how vital good corporate governance is to the long-term continuity of the firm. Implementing a proven accounting system with real-time data flow and up-to-the-minute financials 24/7 can have a significant impact.

The future of accounting

The days of batch processing, which is more suited to the world of paper than bytes, are rapidly fading into history. A real-time general ledger with its always up-to-date financials is the foundation for continuous accounting, the next stage in accounting integration.

FundCount’s real-time general ledger is fully integrated with its portfolio accounting, analysis and reporting functionality. It delivers a single source of truth without the need to manage data flows and reconciliations between multiple systems. FundCount elevates accounting to be the core source of ALL data for financials and analytics.

Contact us to learn how our real-time general ledger can bring efficiency, accuracy and insight to your organization.