Custom Investment Accounting Software

Custom software can support any required asset classes, including stocks, bonds, cash equivalents, derivatives, mutual funds, and alternative investments like real estate or crypto assets. Fund administrators use a no-code logic builder to set up tailored data entry and transactional rules for each instrument.

Activity data is automatically aggregated from investment management systems, brokerages, trading platforms, custodians, etc. The data can be captured in real time or on a regular schedule (e.g., end-of-day syncing with a portfolio management system for daily closing).

The collected data is recorded in an investment book of record according to user-defined rules. Customizable IBOR structure allows fund admins to configure accounts, hierarchies, asset types, reporting metrics, and data presentation formats (default view, drill-up and drill-down options, particular visualization techniques).

Investment firms can maintain parallel sets of investment records for different reporting needs. The books can be configured for various base currencies, accounting frameworks (IFRS, US GAAP, UK GAAP, SOCPA, etc.), and accounting methods, e.g., trade-date vs. settlement-date or accrual-based vs. cash-based methods.

For cross-border investment operations like foreign trading and international dividend payments, the software automatically converts transaction currency to the book’s base currency and calculates FX gains and losses. Similarly, it automates conversion between base and reporting currencies for multi-jurisdictional reporting.

Metrics critical to investment accounting, such as realized and unrealized capital gains, cash flows, accruals, positions, and management fees, are calculated automatically based on predefined methods (e.g., TWR, MWRR) or custom formulas. The software can automate complex tasks like distribution waterfall calculations.

Intraday fair market value and net asset value (portfolio- and lot-level) are calculated based on user-defined rules, taking into account the market value of each investment. AI can be employed to pull up-to-date market prices for portfolio assets directly from market data platforms and calculate dynamic asset values in real time.

Interactive dashboards let users track investment-related cash inflows, outflows, and liquidity ratios. Fund administrators can configure liquidity limits to meet redemption, operational, and compliance requirements. The software runs trend-based cash forecasting and automatically alerts admins about upcoming liquidity shortfalls.

Corporate actions like dividend distributions, stock splits, M&A, and spin-offs are automatically captured, analyzed, and applied to accounting records. For example, in case of a stock split, the system recalculates the number of shares held in a portfolio and the average cost per share and adjusts the records accordingly.

Custom software can calculate taxes for assets held in taxable, tax-deferred, and tax-exempt accounts based on jurisdiction-specific tax rates, wash sale rules, and regulatory requirements (e.g., TCJA for the US). AI can assist in tax-loss harvesting and suggest the optimal investment allocations and funds withdrawal timing to minimize the tax burden.

Custom rules for handling data, transaction, and calculation discrepancies can be applied to both conventional accounting engines and AI models. The software runs continuous reconciliation, flags mismatches, and reports them to the responsible parties. Employees can track exceptions by priority and resolution status in dedicated dashboards.

For investment companies with multiple entities or funds (e.g., private equity firms managing multiple SPVs), the software enables distinct entity-level accounting, automated inter-entity transactions (netting, fee allocations, investor profit-sharing calculations, etc.), and rule-based creation of consolidated reports.

Reports on investment KPIs (portfolio returns, liquidity ratios, etc.) can be automatically generated from customizable templates ad hoc or on a set schedule. The software can also produce regulatory filings in compliance with the necessary standards (GAAP, FASB, SEC, etc.), such as IRS Forms 8949 for tax lot management.

Investment accounting software is protected via role-based access control, multi-factor authentication, data encryption, and other robust security mechanisms. Custom tools can be built in compliance with SOX, SEC, SOC, GDPR, NYDFS, and more. Intelligent analytics can be used to detect fraud and non-compliance in real time.

Generative AI copilots can provide investment accounting teams with real-time assistance across their daily tasks. For example, a specialist can ask a smart bot to summarize data for a report, retrieve source documents for an investment transaction from corporate databases, or explain record mismatches in plain language.

Investment data can be automatically hashed, timestamped, and recorded in a tamper-proof, immutable blockchain ledger. Blockchain provides a complete audit-ready log of investment accounting records, enables quick detection of unauthorized accounting data manipulations, and minimizes risks of sensitive data breaches.