The first week of the month is always our busiest, closing down a large number of month ends for clients on their back office software. So we’re asking you if you’ve got a handle on your process?  We’re talking about your back office system dealing with your reconciliation of all the client and provider income paid, Adviser Office, Intelligent Office, Wealthcraft, Finplan, Curo, XPLAN, they all have the capability. Do you have it systemised, documented and processed so you can use the information effectively in your business?

Whatever system you use, there should be the facility to have a breakpoint at a specified period so you can analyse and extract your data.  Most firms we come across use calendar months and this is used as a source of accurate information for your business strategy and planning.  Now, there are some aspects to this process that are key and having them documented and practiced can pay dividends to the business so it reaps the rewards. In order to maintain the accuracy of your data it’s important to have checks in place where you can qualify and pick up any errors. This gives you, the business owner, confidence to use that data elsewhere as needed.

How to Check and Make Sure Your Data is Accurate

Here are some of the things to check within your business to ensure data accuracy:

  • Is it systemised and documented?
  • This is key to make sure you are consistently processing and checking data in the same way.  It’s surprising how many subjective decisions can be made in all aspects of data and processes, so having the guidance and the process in place reduces the risk to your business.
  • Is the process being followed?  This is all about monitoring your system.  Yes, it’s great to have a process in place but if people don’t follow it and use their own interpretations this can cause massive business problems.  It can even lead to bad business decisions because those decisions were based on previous assumptions.  Question who owns the process?  Who has the responsibility for agreeing changes to that process and communicating any changes if and when needs be.
  • Is your process conducted in a timely manner?  It’s great having the data but if you don’t get it until three or four weeks after the end of the period, it can delay your decision-making capabilities (especially in an uncertain climate).

Contingency Planning

Next is contingency planning.  Are you relying on one key individual to run the process for your business and if so, have you planned for certain scenarios?  So, what happens if that person leaves the business or is unwell?  If they’re the only one with responsibility, without their resource, it could be disastrous!  Always have a deputy or other people who understand what to do and how to do it.

Additionally – are you using the data?  If you’ve got it and your system runs well but you don’t use the data, then why are you running the process at all?  This scenario would mean all that precious data is wasted!  Not sure what to use it for?  There are four fundamental elements you can use from your data:

  1. Your Income by Provider: Have a look at your main providers and the income they provide.  This could tie into re-platforming projects that those providers might be doing and allow you to do advanced planning on any income fluctuations that re-platforming may have.
  2. Your Income by Type:  It’s really critical to make sure that your income data is being reported as the true type that it is (we’re talking about the difference between legacy, fund based and ongoing fees, for example).  This allows you to see any exposure and if there are any changes to regulations within the industry.
  3. Age Debt Reporting: This is a key mechanism to allow you to check you are being paid the money you should be and that you’re not over or under paid.  This isn’t a simple report and requires a degree of understanding on what is driving the data.  So, it may require you to look at your processes and review at which point financial information gets entered into your back office system.
  4. Forecasting Report:  The truth is that the capabilities in this area are still relatively limited across the software available; however we are seeing developments in the pipeline. Even if your software can’t produce this type of report at the moment, by using the above reports you can gain a simplistic overview and can forecast your own income by type and period.

Can’t Get The Reports?

So we’d encourage you conduct a review on your month end process to make sure you’re getting the most out of your data and that it’s accurate.  If you can’t get the reports, don’t panic.  We have helped firms correct some very challenging historic data, so we always encourage a conversation, we’re just on the end of a phone or email!