Committing to an accounting software system is a big endeavor. It impacts how you set up your work flow and it requires at least a temporary disruption as your team members transition and get familiarized. Meanwhile, it is important to stay ahead of the curve in an economic and technological environment where things are evolving so profoundly. For these and other reasons, it is important to do your due diligence and get it right the first time. The choice isn’t an easy one. A number of good packages are available from vendors such as SEI Archway, AltaReturn, FundCount, Eton Solutions, Addepar or Asset Vantage. But how do you know which one is specifically right for you? The purpose of this guide is to help you better assess that question by breaking down into four key areas to focus on and to help you narrow the field of choices.
Alternative Asset Management
Family offices tend to have more sophisticated and unique portfolios compared to other types of investment manager groups. Alternative assets are not only different, they can come with idiosyncratic requirements that a software package may or may not be set up to handle. Crypto, for instance, uses far more decimal spaces than say equities. FundCount supports all asset classes from real estate holdings, art, NFTs, cryptocurrency, collector items and more.
Most developers and software providers similarly support most, if not all asset classes. This is an area where you will want to take a close and careful look, however. Supporting an asset class and actually specializing in it can mean the difference between just having a placeholder field and work-arounds available and having robust reporting capabilities dedicated to that asset class. Each type of investment has unique functionalities and features that must be accounted for individually. If these are not properly addressed in the system, reporting can suffer. FundCount has meticulously gauged and considered the properties of each and every class to ensure that it is fairly represented. This comes to fruition when charting and generating reports.
Privacy Considerations
Data sensitivity is increasingly an issue in an era where cloud storage is prominent and large providers such as Amazon, and even the government, potentially have access to information you would rather not have privy to prying eyes. Cloud storage is available, but for clients with this concern, FundCount makes it possible to store all your data on your own premises, giving you complete control and sole access to it. At your request, the implementation team will set everything up and even fully integrate it with your in house and legacy systems.
Single Source of Truth
Data integrity has always been at the forefront of the accounting industry for obvious reasons. When inputs are compiled into separate ledgers, however, it’s not hard to see how the information can be at a minimum, hard to assess when pulled from those different ledgers in the reporting process. A unified accounting methodology addresses this by using a single book, the general ledger, providing the end user with what is known as and can be relied upon as a single source of truth.
FundCount makes use of a unified accounting system. A unified ledger is more flexible than a multi-book system that has separate general, sales and purchase ledgers. One advantage is that books don’t have to be closed to run reports. Reports can be drawn at any time since there is no need to wait until the other ledgers are balanced.
Continuous Accounting
Traditional accounting is a closed-book system. Reporting is typically run at the end of each quarter when the books on that quarter are closed and the official numbers are released. This methodology comes with limitations. Management decisions require data and if the data is based on last quarter’s numbers, new developments simply cannot be factored in with any reasonable level of accuracy. Estimates are of course possible, but nothing is really known for a fact until the books are closed and the reports are run.
We live in an era of disruptive technology and accounting is being impacted by new solutions along with many other conventions. FundCount, which utilizes continuous accounting methodology, is an early-adopter in this regard. Continuous accounting an innovate approach to accounting that gives you a real-time look at the data, no matter where things are at in the accounting cycle. This takes all the guesswork out of the decision-making process and provides a crucial edge over firms that have access to current information. Before making your own decision on which accounting package to choose for your office, make sure the vendor you are considering offers this inventive approach.
