Regain Control of Reporting and Analytics

Wednesday, April 19th 2023 | 11 AM ET

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Automate month-end close to improve risk mitigation

Month-end close is complex and time-consuming because it involves two distinct processes. The first is to manually receive invoices, manage approvals, and process payments. The second is ensuring these actions are reflected in financial systems or accounting software. As a fund grows, the process becomes even more complicated.

While the end of the fiscal year is the most important closing period, most funds use month-end procedures to track performance. As part of regular accounting, a monthly closing process ensures the numbers are accurate and consistent. Optimizing month-end close gets financial data to leadership faster, enabling more timely analyses and better decision-making.

Unfortunately, most organizations rely on manual processes to perform month-end close. Manual methods can result in a lack of visibility, increased risk of errors, and a reduction in work-life balance.

In fact, a survey by Ventana Research showed that 59% of people take six days or more to complete their month-end close process. Extra time spent on month-end close means less time devoted to analysis, innovation, and other value-added tasks.

Let’s take a look at what month-end close actually looks like in practice:

  • During the first business day of a new month, the feeds corresponding to the last business day of the previous month are received from the fund and the prime broker (PB). The fund performs reconciliation between these feeds and gets the details of the reconciled records and breaking records.
  • Breaks are classified into two categories: fund-side errors and PB-side errors. The fund starts correcting the errors on its side. It performs the corrections (entry, amending, canceling of trades, correcting margin money details, etc.) through the accounting system. After these corrections are made, a new version of the file is generated. This is reconciled with the original PB file. Any breaks are once again identified and more corrections are made on the fund side.
  • This iterative process continues for several days, typically the first five business days of the new month, until the fund is convinced it has corrected all errors. At the end of this period, all remaining breaks are booked as P/L items or entries in suspense ledger accounts or in escrow accounts. (Treatment varies from fund to fund.) Then month-end reports are generated. During this period, the fund also needs to perform its regular daily reconciliation activities.
  • In order to achieve a higher level of accuracy, a hedge fund typically spends the first few business days of every month reducing the number of errors in the month-end reconciliation report from the previous month.

How the IVP Reconciliation Solution streamlines month-end close 

Automated cloud-based reconciliation gives funds a better way to streamline month-end close, minimize errors from month to month, and reduce total time devoted to closing.

The IVP Reconciliation Solution, for example, can help funds make the month-end closing process more efficient, smooth, and error-free. Powered by artificial intelligence (AI) and machine learning (ML) technology, it provides real-time data and assists in error detection while automating manual tasks such as collecting and reconciling financial data.

Our cloud-based reconciliation solution also allows businesses to perform month-end close continuously, ensuring zero-day financial close and reducing month-end close time by as much as 40%.

The solution also addresses financial close management, accounting automation, and intercompany governance. It is also quickly deployable, empowering accounting teams to collaborate from anywhere, improve consistency and control, and gain more time to focus on new challenges. Reconciliation teams will also appreciate the ability to:

  • Spin off and work on “As of Month End” reconciliations in parallel with “As of Daily” runs to avoid redundant work
  • View and reconcile multiple month-end reconciliations simultaneously
  • Schedule or trigger multiple intraday refreshes to see the latest open breaks as of month end
  • Optimize month-end workflows with multi-level approvals and robust auditing
  • Reduce spreadsheet sprawl by transferring data to a single, secure online location

Learn more about the IVP Reconciliation Solution right now or contact to schedule a demo.


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Reconciliation Solution

This reconciliation solution uses AI and ML to increase efficiency, accuracy, and flexibility. It features “any-to-any” reconciliations, including bank reconciliation, and processes millions of transactions in minutes.

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