Why investment managers need workflows and reviews

Client fee billing, invoicing and revenue management in the buy-side investment management community can become a significant source of risk and cost without an efficient workflow and audit process to manage review and approval checkpoints. Investment managers must be able to build and retain client trust as well as satisfy auditors. In today’s competitive and challenging market environment, the need for automated, accurate and timely invoicing is greater than ever.

Because investment management fee billing requires the tracking of market values and often complex fee schedules and calculations, relying on manual or spreadsheet methods is risky. 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. Adherence to the requirement that two individuals approve actions before they can be taken, known as the four-eyes principle or the two-person rule, must be infused into the fee billing process.

Here are three key reasons why workflow controls are increasingly important for investment management CFOs and their teams:

1. Reputation and Revenue Protection

Since invoices are client-facing and directly represent the firm, consistent and transparent investor invoicing, communications and reporting are integral to instilling confidence and delivering a good client experience. Incorrect billing can undermine clients’ confidence in your firm and create cash flow problems. An automated workflow process can provide your team with review and approval checkpoints that will prevent oversight errors.

2. Workflows and Audit Trails that Delight Auditors

Regardless of their size or type of firm, all investment managers are subject to internal or external audits, whether regulatory or contracted. Any firm working from spreadsheets or doing checks outside of their billing system know that audits can be extremely painful. Workflow controls demonstrating second sets of reviews along with associated audit trails are the key things auditors look for. A fee billing solution that forces you and your team to do checks before proceeding to the next steps, and provides an audit record within the same system, will greatly increase your chances of passing any audit.

3. Customized, Detailed and Verified Invoices

Investment managers’ clients have a variety of preferences when it comes to invoicing details and formatting, including contacts with different roles, such as the payer versus other individuals who receive a copy of the invoice. Some clients are perfectly satisfied with receiving summary invoices, while others demand they display market values, averaging details, proration methods, fee schedules and other details according to their standing agreements. A fee billing solution should be flexible and dynamic to fulfill any client request by allowing you to choose to show as much or little as you desire, with the ease of 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 satisfied.

Conclusion

Speed, accuracy and efficiency of invoicing, cash flows and personalized client servicing are crucial to investment managers today. Gresham continues to improve fee billing automation operations with new capabilities that provide more efficient methods of calculating fees, generating invoices, managing revenues, and delivering a positive client experience.

Learn more about Gresham's Control for Fee Billing, which is helping firms increase efficiencies by streamlining review, audit and approval processes into one workflow while adhering to current policies, procedures and agreements.

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