Is Your Firm's Fee Billing Process Damaging Your Client Relationships?

While controlling the compliance risks associated with client fee billing is crucial, providing the best possible client experience is just as important. For investment managers, that means ensuring the highest levels of accuracy, consistency and transparency across the fee billing process – from fee calculations and invoicing, to client communications and reporting.

Invoices are client facing and directly represent the firm – and they are a major cause of complaints and disputes. Incorrect billing or failing to meet client requests can weaken relationships and create cash flow problems. Automation is key to building and maintaining confidence, which is crucial to satisfy and retain clients, and enable your firm to grow on a solid reputation.

Verified, Customized Invoices

Your clients may have a variety of preferences when it comes to invoicing details and formatting, including contacts with different roles. Some clients are perfectly satisfied with receiving summary invoices, while others require more information on market values, averaging details, proration methods, fee schedules, and other details according to their standing agreements.

A fee billing solution should offer standard yet dynamic, out-of-the-box invoices to provide consistency and flexibility to adjust formats and content to easily fulfill any client request by revealing or suppressing information from appearing on the invoice, on-demand. It should also provide a review and approval workflow to check invoice accuracy and ensure all client requests have been fulfilled.

Aligning Market Values with Fees

Your firm or your clients may require custodian-audited market values aligned with their fees. Therefore, your billing team should also be able to provide a detailed breakdown of a client’s fee in a clear and concise document.

This requires the tracking of market values and often complex fee schedules and calculations, which is difficult to achieve manually or in spreadsheets. Automated workflow processes that provide checks, audits and alerts throughout the billing workflow are crucial to reducing or eliminating errors, regulatory or internal audit risk, client billing disputes and revenue loss.

Automation that Builds Client Trust

A growing, global equity boutique investment manager with $6 billion in AUM managed its fee billing process in spreadsheets, requiring two to three team members to spend weeks to prepare and send invoices on a quarterly basis. With increased complexity and volume of billing and invoicing, the need to streamline fee billing became all the more crucial. After implementing Control for fee billing (formerly Electra Billing), the firm was able to increase the speed and accuracy of invoicing, cash flows, and personalized client servicing, while ensuring a high level of data integrity across systems.

An investment manager’s client fee billing process should be error-free, control compliance risk, and deliver a positive client experience. Only an efficient, automated workflow process can provide your team with review and approval checkpoints that prevent oversight errors, manage personalized client communications, and offer the flexibility to meet the specific needs of each client.

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Doug Fritz is a product manager at Gresham.  He is focused on advancing the client fee billing technology and solution, applying more than 20 years of experience in full lifecycle software development, business analysis, and project leadership and management.