Insights

Cloud Based Accounting for Hedge Funds

A Rapid and Cost Effective Financial Management Solution for Hedge Funds


Background

Hedge Funds desire real-time visibility into their financials, but competing priorities, manual processes and a lack of adequate IT infrastructure pose significant challenges. A complete view of the firm’s performance, including management reporting by strategy, is often a one-off, time consuming chore rather than a consistent, repeatable process. Investor reporting often gets prioritized over corporate accounting and the books and records are updated on an as-needed basis. Even with accurate and timely accounting records, the underlying accounting system in many cases cannot provide meaningful reporting in an automated fashion.

Hedge Funds operate in a fast paced and lean environment and cannot afford the time and cost of implementing a large Financials package such as PeopleSoft. Conversely, Hedge Funds operating on QuickBooks have limited visibility into their performance. However, with the advent of cloud-based accounting solutions, there is now a way for Hedge Funds to obtain the functionality of enterprise level financial packages in a rapid and cost effective manner.

Summary of Challenges

  • Limited management reporting and drill-down functionality
  • Untimely or inaccurate financial reporting to support effective decision making
  • Inaccessible data to monitor and report on KPIs
  • Unintegrated financial systems, which lead to process inefficiencies
  • Error prone and time intensive manual data manipulation

Cloud Accounting: The Revolution in Financial Software

Cloud-based accounting is deployed in a manner known as ”SaaS” or Software as a Service. With SaaS solutions, the software is accessed via a standard web browser, which means that Hedge Funds can have robust financial management functionality without having to install any new hardware or software. Cloud-based solutions can be deployed quickly, providing a superior Return on Investment (ROI) for return-conscious Hedge Funds. Unlike traditional on-premises accounting software that require a significant up-front investment to purchase, implement and customize, SaaS financial solutions are procured through a modest, yearly subscription basis. With no software to install, the only implementation task is configuring the system to the Hedge Fund’s specific accounting needs. SaaS solutions require significantly fewer technical resources to manage than on-premises software, reducing costs and eliminating the need to maintain in-house IT expertise. Other ROI drivers are the extensive automation and integration capabilities – increasing productivity by eliminating manual data entry, paper-based processes and spreadsheets. Adopting cloud financial solutions also provides Hedge Fund managers with enhanced visibility into financial and operational data through robust management reporting.

Cloud Computing Benefits

  • Real-time visibility of financial and operational data
  • Quick deployment model to add-on additional strategies or funds
  • Higher ROI through reduced IT costs, time savings and process efficiencies
  • Lower up-front implementation costs
  • Scalable to grow with changing business needs
Cloud Accounting for Enhanced Portfolio Company Visibility
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