• Blog
  • 5 Min Read
  • December 15, 2022

Automated Investment Accounting Guide | Clearwater Analytics

When it comes to accounting, automation can be a huge help. Not only does automation speed up processes and increase accuracy, but it also frees up time to focus on other areas of the business.

Modern software gives teams access to automation and the fastest, most reliable tools ever built for accounting and reporting. Automated investment accounting can help organizations save time and money, while also ensuring compliance with regulations.

What is Investment Accounting?

Investment accounting is the process of recording, classifying, and reporting the financial transactions and other events affecting an organization’s investments. Investment accountants are responsible for ensuring that all these transactions are accurately reported and adhere to all applicable accounting standards. This role requires a deep understanding of financial markets and the different instruments used to manage investments.

Investment Accounting Processes You Can Automate

When it comes to investment accounting, there are many tasks that can be automated to make processes run more smoothly. The following are several examples of processes that can be automated by investment accounting software.

Investment Data Aggregation

Depending on the scale and complexity of a portfolio, investment data could come from many different sources worldwide. Data connections could include custodian banks, investment managers, brokers, trade order management systems, and third-party security master data vendors.

While it is possible to set up all necessary data connections in-house, businesses often find it more efficient to outsource data aggregation processes to an automated service provider. Automated data aggregation can help teams save time and resources that would otherwise be spent setting up and maintaining accurate connections to global data sources.


Once data is aggregated, it is important to perform reconciliations to guarantee the data is accurate and up to date. The process of reconciling data between the various data sources (e.g., custodians, asset managers, trading platforms) gives teams the confidence they need to make strategic decisions based on their investment data.

One of the biggest benefits of an automated reconciliation process is speed. Software can often identify discrepancies and reconcile data at a faster rate than manual processes. Another benefit of technology in reconciliation is the ability to facilitate asset growth without expanding headcount.


As organizations expand their portfolios into complex asset types for various reasons such as enhanced yields or diversification, accounting processes often become more complex than they would be for vanilla fixed income securities. With this complexity comes additional reporting requirements. Investment accounting automation can make it easier for companies to properly account for new asset types.

With automated accounting software, business gain access to timely book-of-record accounting and efficient month-end close processes. These digital tools also deliver the flexibility to handle multiple currencies, accounting bases, and asset classes.


Investment teams must ensure their portfolios stay compliant with regulatory requirements as well as any policies defined by key stakeholders. Many compliance tasks can be automated to give teams peace of mind knowing that their portfolios meet any necessary requirements.

The sooner compliance violations are recognized and managed, the better for investment teams and stakeholders. Automated software can be configured to send alerts as soon as a violation is detected, enabling businesses to make timely updates to their portfolios.


Risk reporting is essential to help investment teams understand and manage risks or exposures on the asset side of the balance sheet that could affect the business. By leveraging automated reporting around risk and exposures, teams can free additional resources to analyze the results instead of spending time in spreadsheets and repetitive low value tasks.

Automated risk reporting gives teams insightful analytics to ensure they have access to portfolio exposures. Risk alerts can be customized to provide the most timely and actionable data related to specific concerns.


Performance reports are a critical component of asset management. Investment teams use performance reports to check total returns versus benchmarks and perform attribution analysis, among other tasks.

Many performance reports can be automated, which gives teams access to the data they need on a regular basis without having to manually enter data or sort through spreadsheets. Automated performance reporting can make it easy to analyze different return types and view performance across multiple time ranges.


Investment reporting can be automated to deliver timely, actionable data at regular intervals. Additionally, automated reports can be customized to meet the unique needs of the team.

Reports can be configured to assist investment teams in monitoring trends, measuring performance, and tracking critical investment information. They can be tailored to both high-level and in-depth reports for business areas including accounting, compliance monitoring, performance metrics, and risk analytics.

Benefits of Automating Your Investment Accounting Processes

While it may take some time to get automated accounting processes set up and running, the return on investment makes it worth the effort. Every task that is automated frees up resources for the company, saving time and money and enabling greater scalability.

Businesses that automate their investment accounting processes see a wide range of benefits, including enhanced asset performance monitoring, improved analytics, and a comprehensive view of all assets from a single dashboard. Switching to an automated system can help reduce risk, increase compliance, and improve performance while simplifying processes and enabling growth.

Save Time & Reduce Costs

Saving time is one of the main benefits of automating investment accounting processes. In today’s fast-paced world, every minute counts. With automation, resources can be moved from time-intensive investment accounting processes and put to better use.

Reducing costs is another benefit of automation. A streamlined accounting process not only saves money in the short run, but also reduces long-term operating costs.

Close Your Books Faster

The monthly close process can be sped up with automation, giving teams more time to focus on other objectives. Through automated data aggregation, validation, and reporting, closing the books at month and year end can be turned into a quick, efficient process.

Any delays caused by manual errors can impact an organization’s ability to make fast, informed decisions. Automation can lay the foundation for effective decision making by providing crucial investment data as soon as possible.

Reduce Manual Input & Improve Accuracy

Automating your investment accounting processes can enable your team to be more efficient by reducing error-prone manual processes. As manual processes are decreased, efficiency increases to benefit the entire business.

The accuracy of data and reports also increases when using automated tools. Modern software can deliver more accurate reports at a faster rate than traditional methods of data management.

Improve Inefficient Practices

To keep up with increasingly complex portfolios and regulations, many organizations have developed a stopgap approach to investment reporting. While this approach might get the job done, it is often complicated by time-consuming and error prone processes.

Implementing automated systems can reduce costs and provide additional resources that can be used to grow the business. Firms that successfully implement automated systems will find themselves more capable of accelerating their success in reporting and accounting for years to come.

Investment Accounting Software

Businesses use investment accounting software to improve business practices, speed book close, and obtain reports for compliance, risk monitoring, and performance. Investment accounting software reduces operational burdens and frees up additional resources to focus on analytics and strategy.

When it comes to investment accounting software, there is only one solution offering a single instance, multi-tenant platform for investment accounting and reporting across asset classes and geographies. Clearwater Analytics offers the most advanced, cost-effective, and secure solution to help your organization increase yields on investments.

Schedule a demo today to see the Clearwater solution in action.