AIS Fund Administration, a provider of outsourced support and administration for hedge funds, has used Confluence’s Unity Financial Statements software to provide hedge fund financial reporting for its clients.
Automated Financial Statement Preparation (AFSP), os designed to reduce the risks caused by the use of error-prone spreadsheets and manual processes, and creates significant efficiencies and time savings for fund managers.
"Heightened demands for transparency from investors, regulators and auditors have rendered traditional spreadsheet-intensive statement preparation processes too onerous," says Kirk Botula, Confluence President and Chief Operating Officer. "We are pleased that AIS turned to the Confluence Unity platform to create an innovative solution to respond to this critical market need."
AIS developed AFSP to help hedge fund companies manage a "near perfect storm" of conditions that have made the development of financial statements particularly challenging. For example, hedge fund asset classes have become more complex, and this has also increased the complexity of fund accounting requirements. Derivatives, structured products, and other financing alternatives need to be properly accounted for in financial statements. In addition, rules such as FAS 157/ASC 820, requiring fair value measurements and disclosures, and FAS 161 requiring disclosures about derivative instruments and hedging activities, have increased the burden on fund administrators at a time when investors are also demanding greater transparency and control.
AFSP is a technology-based solution that benefits all parties who must provide these detailed statements. The highly flexible solution has significantly reduced the need for spreadsheets by mapping data directly from individual general ledger accounts onto a statement’s schedules, charts and footnotes for efficient, error-free, and straight-thru processing. Trial balance accounts and portfolio holdings are pre-mapped, formatted, and systematically checked for errors. Their output populates a customised Microsoft Word template that creates each financial statement.
"The integration of the Unity software with a robust general ledger package such as ShadowSuite transforms the process from one driven by spreadsheets lacking proper financial controls, into a database-sourced environment with robust financial controls including automated error checks and audit trails,” says Paul Chain (pictured), President of AIS Fund Administration. “COOs, CFOs, investors, and especially auditors, have responded very positively to this service and its underlying process.”
