Beyond the Numbers Blog

Bill Paying: It’s Only Boring Until Something Goes Wrong

Posted on September 27th, 2018

It’s hard to get excited about cash management and the mundane task of bill paying. But, for any family office manager or controller that has issued a check from a wrong account, missed a critical payment, caused an overdraft, or erroneously paid a vendor twice, you know firsthand how time consuming it can be to right a situation that has gone awry. Being able to track, manage, and report accounts payable/receivable activity may be boring, but it’s a critical aspect of every family office – and not one that is tolerant of mistakes.

Spreadsheets and task-specific bill paying software might suffice for the smallest of family offices, but as the family grows and the number of entities increase, these solutions will be far less effective. Fortunately, there are more comprehensive software options available that can better handle the complexities of managing a family’s cash and expenditures.

Your accounts payable and cash management software should deliver operational efficiency, which is only possible with support for the full payments lifecycle, from booking an expense to reconciling bank and credit card details. The key is the ability to integrate cash management functionality as part of a broader accounting, investment analysis and general ledger solution. Specific cash management functionality should include:

Check writing – accounts payable data from other systems needs to be easily imported into your accounting and general ledger system of record to support electronic bill payments, wire payments and printing and mailing of paper checks, which are traditional requirements of every family office. Streamlining the workflow and automating these time-consuming everyday tasks immediately improves accuracy and operational efficiency. Vendor management – due to the many ways invoices can be received and paid, flexibility in setting up accounts and the ability to handle email invoices, split payments and track and record multiple accounts for a single vendor will facilitate this critical function.

Expense tracking – complex family relationships make it challenging to accurately categorize, book and track expenses. Templates that can easily be customized and that show details of the exact allocation of a specific expense help to better manage expenses and project cash flows. Once again, flexibility is key as every family office’s needs are different.

Bank reconciliation – daily cash reconciliation and processing not only ensure the family is spending and investing according to mandate, but can also identify anomalies – from a benign clerical error to potentially fraudulent activity. Accurate reconciliation rests on aggregating data from various inputs into a single, consolidated source of information against which bank and credit card details can be compared.

Reporting – data from all cash management activity must be easy to capture and present in reports, which should be interactive to assist in reconciliation. Since each family member is likely to want to see accounts payable information in a different format, a robust reporting tool is critical to provide accurate, timely information in a way that satisfies specific requests.

FundCount’s FC A/P adds new functionality to the company’s multicurrency general ledger, the foundational powerhouse of FundCount’s flagship accounting, investment analysis and reporting software. Contact us to learn more.