The Trade Accounting component of TheBooks provides a multi-currency accounting engine tailored to the accounting and reporting requirements of the CTA with managed accounts. It handles commission and fee accruals and charging. Management fees, incentive fees, and interest accruals are formula-based. Integration with the Web-based performance reporting module provides easy distribution of all performance tables and other reports.
Flexible, multi-currency accounting
The Accounting module of TheBooks is a true, multi-currency chart of accounts that allows accounts and portfolios to be domiciled in any currency. Information is presented as both a balance sheet, income statement, and performance tables, and can viewed rolled up to the reporting currency or at the individual currency levels.
Back and forward-dated transactions make it easy to maintain accurate records of all activity. Daily currency fluctuation calculations provide an indispensable tool to effectively manage cash in multiple currencies.
Trading commissions and fees
By maintaining commission and fee schedules for each account at the market level combined with a streamlined commission adjustment interface, you have the ultimate flexibility to track trading-related fees at as gross or as fine a level of accuracy as required. Because of TheBook's straight-through processing, as trades are posted, all commission and fee accruals and charges automatically happen.
Accounts can earn interest based on brokerage cash, cash held elsewhere, or based on securities purchased on behalf of the account. Interest is accrued based on user-defined, account-specific formulas (for brokerage cash, cash held elsewhere) on a daily basis and the recording of interest payments is as simple as entering the amount received in a spreadsheet-like interface.
Because the effective date for receipt of interest payments can be anytime, you can batch the receipts at the end of the month, or enter them in anticipation of the receipt.
Management and incentive fees
Every manager knows that a uniform management and incentive fee structure across all of their managed accounts, while highly desirable, is not the reality of the investment world. Management and Incentive fees are configurable at the account-level in TheBooks. In addition, they are formula-based, meaning complex fee structures such as hurdle rates, tiered management fees based on assets, and fees based on beginning or ending monthly equity levels are possible.
Both management and incentive fees are calculated on a daily basis so your clients can be provided accurate NAVs on a daily basis and you always know what your expected fees are as of any given date. High water marks are automatically managed as the result of additions and withdrawals and TheBooks also provided the ability to generate invoices or provide Excel® sheets in those situations where billing information is provided to clearing brokers rather than directly to your clients.
Finally, if your program includes both futures and FX and the holdings are at multiple brokers for a given investor, TheBooks will perform fee calculations based on the net performance of all accounts which make up the investor's managed account.
Performance tables are available in three styles: Summary, Capsule, and Detail. These can be calculated using the Fully-Funded Subset or Daily Compounding methods. Accounts can be reported on alone or as part of a group and both accounts and groups can have reporting currencies defined for them. This means that a non-US based account can be reported to the investor in Yen for example, but in US dollars as part of a portfolio.
Because the reports are delivered using the Performance Reporting module of TheBooks, it is easy to provide remote access to you and your clients.