Transparency in accounts is necessary when you handle diverse investment portfolios for numerous clients. You need to provide account summaries in time and process portfolio accounts in a systematic and fast approach. You must see to it that your operational system becomes efficient for audit trails and follows an up-to-date data generation to reflect real values and market positions. With portfolio management systems made available for wise portfolio accounting, portfolio managers will find it easier to provide clients with the needed investment information for an efficient t and transparent portfolio accounting. Portfolio management systems eliminate more than just a single bottleneck in portfolio accounting.
A promising portfolio management system is one that does not disregard the importance of risk control and analysis in optimizing the growth potential of clients’ investment accounts. With risk analysis manager and related solutions, you will not only provide safeguard policies and strategies for all investment classes that you handle, you will also be empowered with more features and benefits that only risk analysis and manager software could provide for your portfolio management systems. To get a better idea on how important risk-hedged, fully supported portfolio management systems are, below are the most remarkable advantages that this technological tool provides to portfolio managers.
Following a flexible structure in risk assessment, your portfolio management systems should provide risk ratio analysis features that are comprehensive enough in scope so that you can come up with better investment decisions after singling out the best feasible strategy out from a dozen of investment scenarios and perspectives. Since the method used in calculating risk levels and generation of data for reports and summaries are automated, your portfolio management systems will help eliminate manual processes that are more susceptible to error and data manipulation. If your portfolio management systems are supported by a great risk analysis manager, possibility is that you will be given the capabilities to fully control elements of risk by use of diverse key ratios, comprehensive risk models and strategic simulations based on real business scenarios.
When it comes to the aspect of transparency and integrity, your portfolio management systems should be integrated with multifunctional risk analysis manager software to fully provide you with point-by-point framework in risk measurement out from calculation methodologies and input policies that are reflective of the current and existing market conditions. The tool even provides functionalities in computing trade risk compliance analyses.
One of the terms that can describe you, if you happen to be a portfolio investor, is a speculator. This is primarily because you are expected to speculate on the market before you actually come up with a decision whether or not to invest. Apparently, you are at risk of making wrong decisions if you are not properly informed of the situation in the market. This is the primary reason why you should always be equipped with the tools that could provide you with real time market data. With such tools, the risk of making wrong analysis and subsequently erroneous decisions are avoided.
While it is easy to understand the need for real time market data, getting it is a totally different thing. In fact, it could be quite challenging if you are not well-informed of the many ways to gather this. Since you are tackling market data here, you may have the impression of this being found in the newspapers. To some extent, such information could indeed be found in the dailies. You could easily encounter one just by browsing the business pages. However, you should not consider this as real time market data. Real time refers to information that is actually developing at the very moment that you have come across it. The same goes to other traditional sources, such as radio and TV.
If you are really interested in real time market data, the best resource would be the internet. The internet is where those news providers could easily upload information at any time of the day. This means that you are assured of the freshest news regarding the market. With the real time market data, you could come up with timely resolutions or actions regarding the investments that you have or those that you still have to realize. The internet though is still a generic resource for such information.
It would even be more advantageous on your part if you actually get to know of websites that could provide you with real time market data. Such websites actually abound already. You could thank the different companies that provide the service of informing investors like you of the trends and possibilities of the market. While the information is free, such companies may ask you for some amount as payment for related services or for additional and more strategic information. Of course, if you wish to take advantage of real time market data, you may have to pay for these.
One of the best ways of obtaining real time market data though would be to download software programs related to market analysis. Portfolio management software is one example of such tool. With such a tool, you could easily get real time market data from different sources. The good thing about this is that the sources are always credible. This means that your data is very accurate and could serve as reliable basis for your plan of action. You may have to buy the software though but you should think also of the gains that you would have by having this.
As a serious investor, you should not be complacent about the conditions of your investment portfolios. You should remember always that you have spent huge amounts of money in acquiring such stocks or shares. In this circumstance, you simply should not allow losses in whatever way. This could be resolved with the help of investment management software. When you have more than just a few investment portfolios, you would certainly feel the need for the capabilities of investment management software. The next thing that you may have to deal with is the question of where you could acquire such software. You may also need it to be the best.
You really do not have to look far for searching investment management software. All that you have to do is to make good use of the internet. You could particularly seek the help of Google for your search. Once you hit the search button, you would be surprised to find out that there are many websites that actually offer to sell investment management software. You could browse these one by one and get to know more about the software and what it could do for your business. However, this may be considered as a long and tedious process.
You must realize that even as you encounter so much information about investment management software, you could still end up clueless on the matter. This can be attributed to the fact that you may still not know what the necessary features that such software must have are. One of the features that investment management software must have is that it should be able to help you in managing more than one portfolio investments. Actually, such a feature is imperative because, you may have to diversify and increase the number investments in the future. Managing these portfolios could be very difficult if you do not have such software.
There are two types of investment management software that you should learn about. These are web-based and installed software programs. The former means that the software that you are going to use would require you to have a stable internet connection all of the time. If you are not connected to the internet, you may not be able to make use of the said software. Obviously, there is a disadvantage here. On the other hand, installed investment management software does not require internet. It is downloaded and directly runs on your PC independent of the web. However, you must realize that the information that the software would need to process may come from the internet too. This is the reason why many would prefer the one that is internet-based.
If you wish to know what the best investment management software programs are, you could make use of the reviews. There are websites that are totally dedicated to providing people like you with reviews on the different investment management software programs. However, you should still try to be objective in determining which really can be considered as the best. You could always do some trial though.
Read more about investment management software here.
Many traders commit the mistake of sealing a negotiated trade with no room for doubts. While there are instances that trading is successful right from the start of the process down to the very end until the goods or investments are delivered, there are also a number that went awry with one of the parties getting the losing end. Apparently, failures like these could be attributed to the absence of proper post trade processing. There could be some loose ends during the actual trade but with the application of post trade processing, errors or vulnerabilities could be avoided. This means that both parties could come up with fair bargains.
Usually, the weak points of the trade do not become very obvious while negotiations are going on. This could be caused by many factors. In cases when both parties involved in the trade are fair and honest in their dealings, such weak points could still occur because of miscommunication. This is particularly common when it comes to trading that is done through the internet, where communication may not be as effective as when the parties involved actually sit and discuss. With post trade processing though said vulnerabilities could be discovered. This happens when the parties go through the details of the transaction. This is why post trade processing should be part of the agenda as an important process.
Ownership of stocks that are subjected to a trading transaction is the main concern. Apparently, unless the papers related to the ownership of stocks or commodities are not transferred to the buyer, the trade may be deemed as unconsummated. However, the transfer of records of ownership does not occur immediately. It happens after a lengthy process of negotiation between the seller and the buyer. Once the deal is done, the transfer could be carried out as part of the post trade processing. Such transfer of ownership rarely happens before the post trade processing.
Another agenda that should be tackled during the negotiation or transaction is the transfer of securities or cash. A clear process should be implemented in this regard, one that is beyond the suspicion or doubt of either party. This too is part of post trade processing. Details about the procedure for the transfer may be discussed during the actual transaction. However, these should be reiterated by both parties during the post trade processing. The absence of such could lead to mistrust that could result in either party being labeled in a negative way, which is definitely not an advantage for traders.
There are cases when it is through post trade processing that adjustments are made; ones that may absolutely change the nature of the previous transaction. This is primarily because of the fact that the market is constantly fluctuations. If the fluctuations do not create a huge difference in the prices, then the adjustments may not be necessary. However, if the prices on the trade were based increases or decreases sharply, then there may be a need for adjustments during the post trade processing.
Portfolio accounting is essentially about determining gain or loss. This is especially important when an investments in the portfolio is sold. Closing a position causes a realized gain or loss. Before selling, the gain or loss since purchase is only an unrealized appreciation or decline in value. Proper portfolio accounting requires an understanding of cost basics and holding period.
Realized Gain or Loss
In this portfolio accounting, the sale proceeds realized from selling a security in a portfolio is the whole amount received. This includes both cash and the fair market value of anything else received in exchange for the security. Determining gain or loss on the same of a portfolio security involves comparing the amount received with the basis of the investment. A gain occurs when the sale proceeds exceed the basis in the sold investment. There is a loss when the same proceeds are less than the basis.
Basis of a Security
The basis of a security in portfolio accounting is usually the cost of the purchase plus any associated commission and fees. The basis is different in portfolio accounting if a security is acquired by a different way than purchase. A gift during the life of a donor retains the basis of that donor. The portfolio accounting of the gift recipient uses the basis of the donor. However, the recipient of inherited property accounts for basis as the fair market value of the investment on the date of the decedent’s death.
Portfolio accounting for sold investments requires determining whether the holding period was short-term or long-term. A gain or loss is long-term when the investment is held fir more than a year. The gain or loss is short-term if the investment is sold a year or less after the purchase. The date of purchase is recorded to account for the holding period. The date of sale is the final day of a holding period.
A fund accounting software system manages business transactions and accounting activities across multiple currencies for alternative investment investors. There are so many of them in the market today. Here are eight of the most popular.
Abila Fund Accounting 100. Formerly Sage MIP, this fund accounting software is ideal for governments and nonprofits. It has earned the Campbell Award for popularity among customers on multiple occasions. This scalable system allows users to add modules to the system.
The Financial Edge. A forerunner in fund accounting software, this is specifically developed for nonprofits. It offers one of the best fund accounting solutions. Manage all accounting functions with its specific functionality and user-friendly interface.
Accufund Accounting Suite. This fund accounting software is a scalable nonprofit accounting solution that is easily implemented to cover the core accounting needs of most organizations. It also offers a specific option for government accounting needs.
Microsoft Dynamics GP. For organizations managing multi-tiered funds and unique funding streams, this fund accounting software is a great choice. It is able to automate much of the administration process and give timely detailed financial reports.
Microsoft Dynamics AX. Known as the most functionality rich ERP system in the Microsoft Dynamics family of products, it offers more than fund accounting software. It is usually installed on-premise, but can also be hosted remotely.
Microsoft Dynamics NAV. The fund accounting functionality in this system can help nonprofits track their expenses across multiple ledgers, manage grants and monitor donor contributions. It also helps with GASB compliance.
Multiview Enterprise .NET n10. A full-featured financial management solution, this fund accounting software offers 14 user-friendly modules and alerts with dashboards, imaging workflow and ViewSource 360 for users to easily monitor and control processes.
SAP Accounting. Over 30,000 global companies use its ERP Financials to manage different kinds of accounting needs, including fund accounting features. It ensures compliance with industry standards as well.
The financial services industry continues to be more electronic, global and regulated, with new capital and margin requirements and reporting rules. This requires financial institutions to address operational efficiencies and look into new ways to reduce costs. With growing volumes, a more complex clearing process and declining commission rates, firms should streamline post trade processing globally.
Aside from post trade processing, managing money is also at the core of a financial institution’s business. From profitability to investing its own fund balances on a day to day basis to underwriting bonds and holding customer assets in safekeeping, the lifeblood of a firm is tracking and investing funds to its best advantage.
For both sell and buy side mangers, effective confirmation matching and processes are an important subset of this overall post trade processing trend, and they will become more and more significant over time. As post trade processing volumes for FX, options and OTC derivatives grow, it becomes more and more important for real time confirmation matching and related services to keep up with these volume flows.
The post trade processing environment has become an area where competitive advantages are won and lost though effective solutions. Those investing in these services will clearly win out over those who do not. And this trend will most likely accelerate as volumes continue to increase, and as regulatory and compliance standards become more demanding.
Fortunately, there are so many companies today that offer world-class, post trade processing solutions that help both sell and buy side clients improve management of operational risk, reduce costs and drive competitive advantages.
These post trade processing solutions includes operations that help financial institutions process securities and derivatives to efficiently manage their middle and back office processes and workflow along with integrated solutions for bank treasury and portfolio management, settlement and clearance.
Companies with excess cash usually choose between different investment options for their money. These companies evaluate different investments based on the length of time they wish to hold an investment and their desired rate of return. Businesses investment accounting vary differently depending on the type of investments they choose.
While many companies may hold equity investments on their accounting books, financial institutions like banks and investment groups are the primary holders of equity investments. Companies must properly report these items on their investment accounting financial statements for outside stakeholders (external individuals or entities interested in a company, such as banks, investors, lenders or competitors).
Equity investments on investment accounting represent money spend to buy stocks or bonds from another company. These items are held as investments, with the holding company expecting a return on their invested capital. Stocks and bonds are the two most common investment accounting types of equity investments. Stock investments are reported as the price paid for the stock, while bonds should be reported at fair market value.
Equity investments are classified under one of three types of categories: held to maturity, trading or available for sale. Held to maturity investments indicate the company will sell the investments when they mature in value. Trading investments in investment accounting are actively traded by the company, and available for sale are matured investments the company is willing to sell.
Equity investments on investment accounting are reported at the end of each accounting period on the balance sheet company. Bond investment must be revalued at fair market value every time they are reported on the balance sheet. Equity investment accounting guidelines are found in Statement of Financial Accounting Standard No. 115, issued by the Financial Accounting Standards Board (FASB).
Over the past couple of years, we have learned that companies will save a lot of money and enjoy a reduction in administrative manpower by implementing financial asset management systems. There are so many reasons why companies need financial asset management systems. Usually, the primary drivers are visibility and increased efficiencies that lead to reduced manpower, reduction in spending, visibility of inventory, risk management, management reporting, asset reuse, security management, warnings based on asset related events, and visibility of compliance positions.
The key to any financial asset management system is an asset register, usually with functionality built around the records in that register. Some help desk systems have asset registers, although they rarely give the functionality and accessibility required to effectively manage assets. Low cost asset registers mostly do not give the flexibility to configure their application as needed.
If you are looking for a financial asset management system, make sure that you pick the one with features that will jive with the needs of your company. Go with financial asset management systems that has the following attributes.
- A simple asset register to assist with corporate governance
- Asset KPI reports and asset performance reporting
- Asset lifestyle management
- Financial asset management and depreciation calculation
- Keeping machinery maintained with planned maintenance
- Tagging and periodically barcoding scanning assets to ensure correct inventory
If you are a company that will usually gain all of the financial asset management system benefits above that are relevant to them, and the following unexpected financial asset management system benefits will usually apply.
- Easy reporting on elements of the inventory by different classifications
- Reuse and visibility of assets placed in storage
- Visibility of the reliability of assets by user, model and manufacturer
- Reduction in asset purchase costs via reuse and price comparison
- Asset register automatically kept up to date via integration to other systems
- Other systems kept up to date via integration with the asset manager software
- Email alerts on important events like capital acquisitions and disposals
- Help desk that instantly attach an asset to an incident to facilitate quick resolution
The investment accounting software package that you select can have a significant on your organization. Some investment accounting software packages are simple while others are complex and involve many users with different access levels to data. Whatever the size of your business, your investment accounting software should give you a way to record transactions and get a better understanding of your business operations.
Assess your needs. Put together a committee that is made up of members of various departments with no more than 7 members. Have every member analyze the needs of their department. Analyze how these tasks are done and come up with plans to show how its efficiency can be increased with an improved accounting system. If you do not have the time or manpower to do so, consider hiring an independent consultant to assess your business and give an investment accounting software package recommendation.
Understand the kinds of accounting software packages. Entry level investment accounting software is for smaller companies with $5 million in sales or less. Companies with sales no more than $100 million and not more than 100 employees usually use small to medium business software. Companies with higher numbers use small to medium enterprise accounting software. Enterprise resource planning software is used by big companies with no more than $500 million sales and 500 employees.
Compare pricing. Entry level investment accounting software can cost between $100 and $2,500 while large companies can pay up to $250,000 and up for an accounting software package. Pricing should not be the most important concern, though. Rather, it should be to ensure that the accounting software package meets the demands of the organization.
Schedule on-site demonstrations. Vendors should be more than happy to let you and other decision makers to test drive the investment accounting software. Discuss how the software can be implemented and integrated into your business. Ask the vendors about installation times and any system requirements for compatibility.
Review the legal consequences. When making a big investment in an investment accounting software package, have your attorney go through the contracts to protect your best interest. Language should be stated in the contract regarding your recourse of the software does not work. Note the cost of maintenance and upgrades to your software.