Automation for fund accounting – the future starts now
The impact artificial intelligence and automation could have on the future of fund accounting is something that has been discussed for a number of years now. In reality, the future impact is without limit and always changing. So, where are we right now? If you are in asset management, you are always looking to gain that competitive edge on the competition. However, automation in fund accounting is not just in the future – it is already here. Fund accountants and asset managers are already finding ways to help benefit their businesses and processes with existing technology.
Today, we are being told to stay home due to a global pandemic. From a business operation perspective, this was probably not a difficult transition for many reading this article. While some companies scramble to stay in operation and quickly transition entire workforces to a work-from-home standard, many fund managers already have a home office with all the capabilities and functions they would at work. As audit and tax professionals, we have had to learn how to build working relationships remotely with clients we may have never met in person. It is about being open and accepting to changes and advances in technology that have made it possible for our industry to grow and adapt.
While there is no way to know what the final impact from COVID-19 will be, the ability of most in this industry to continue operations with little to no disruption sheds light on what has already been accomplished. Easy examples are video conferencing, share sites and digital workspaces, so no matter where you are in the world, you can easily share work and information with clients and employees.
In considering a new normal, fund managers will continue to have to deal with concerns of investors, profitability and cost efficiencies. Over the last few years, fund managers have been struggling with the mounting pressure over high fees. The CFA Institute reported in 2017 that moving towards standardizing data and automated financial reporting could help reduce the cost of preparing and publishing information, allow accounting functions “to identify risks, support specialized decision-making in real time, and improve forensic accounting.” The impact of automation and using a standard system of reporting is not just cost-effective, but it can become a critical piece to the future and potential growth of funds managed.
Here are some other advantages to using an automated financial reporting process:
- Fund accounting department
-Decrease in hours spent with initial preparation and rolling forward of the financial statements, providing more value-add time for staff and employees
-Increased efficiency during review of financials, allows focus on significant matters
-Reduces time to check accuracy of statements
-Increased availability of real-time data reports for better decision-making - Fund accounting control environment
-Increased reliability by avoiding clerical mistakes and hardcoding errors
-Improved automation process, linking financials directly to general ledger
-Increased safeguards to protect from manual overrides and provide easy tracking of overridden inputs
-Reduces risks of accidental changes to presentation and formulas, as they can only be changed by those with proper user access
-Increased comfort and validity of audit evidence, as using standardized and automated reports provides consistent and time-saving support to external auditors
Firms that are still preparing financial statements manually should consider the benefits of using automated software for financial reporting purposes. Automation can result in cost reduction, increased efficiency and more informed business decisions. The impact technology is already having on fund accounting has been substantial, and with future advances, it may just be getting started.
For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.
