• Blog
  • 5 Min Read
  • November 1, 2021

What is true Investment Accounting-as-a-Service?

Written by:
The Clearwater Team

Getting a clear view of the exposure, liquidity, and valuation of investments used to be more straightforward. But investments are no longer straightforward, especially with the introduction of alternative assets like hedge funds, private equity, and real estate, just to name a few.

As alternative investments grow within a portfolio, so does the need to have a holistic view across asset classes. The lack of standardization across alternative investments as well as the multitude of reporting and valuation methods leaves most portfolio managers scrambling to gather data across files, spreadsheets, and various systems and paper statements. The exercise is often time-intensive and filled with tedious manual tasks.

Things are changing though, and portfolio managers are moving to investment Accounting-as-a-service. This article defines what true investment-as-a-service is and what to consider before choosing a solution.

A True Single Instance Multi-Tenant Solution

First, we need to deal with the elephant in the room. Some companies attempt to posture as an investment Accounting-as-a-service solution (IaaS) but are not truly a software-as-a-service (SaaS) offering. Rather, they were on premise software, retrofitted to the cloud.

For companies that have been lured by the promise of a SaaS offering, only to find that the company is really an on-premise solution, retrofitted for the cloud have learned a hard-earned lesson. These companies have learned that for an IaaS solution to be a true SaaS, it must be built from the ground up for the cloud and operate within a single instance environment.

SaaS offerings are typically popular because they provide speed, scalability, configurability, and security that on-premise solutions cannot match. In addition, SaaS provides additional services such as ongoing maintenance and new releases that reduce IT’s workload. Most importantly, the offer a “correct it once, for everyone” capability across the data set.

As a true SaaS, investment accounting as a solution should provide this fundamental value. Value that can only be created by bringing mission critical data into a single instance environment.

What-is-true-investment-accounting-as-a-service

Clearwater was built from the ground up to be cloud-native. Clearwater eliminates the need for any on-premises hardware, reducing the complexity and the costs associated with traditional datacenter infrastructure, while providing lightning-fast application responsiveness and the highest quality data set possible.

Single Security Master Data

Many investors and accountants are aware of the need for a single master data source to manage their financial transactions. However, many still hold onto multiple ledgers that can complicate accounting processes, such as reconciling accounts or allocating capital gains across different portfolios. The solution is a single security master, which integrates portfolio data from various sources into one system.

A unified security master file incorporates all the information necessary to keep your data accurate. This includes data on pricing, credit ratings and factors as well as sector specific details like industry standard accounting practices that are relevant in today’s market environment.

At Clearwater Analytics, we believe in one version of the truth for all our clients, so we offer a single instance, multi-tenant platform where single security master data is used by all. Because we use a security master data file discrepancies found for one client are resolved for everyone uniformly.

The collective benefits of a single instance

  • Supplies a single go-to source for data and context.
  • Collects, organizes, and analyzes data across multiple asset classes to generate a single view of the data.
  • Drives financial statement audit, regulatory compliance, and risk management efforts.
  • Helps you increase accuracy while reducing costs, mitigating risk, and improving compliance.

While the security master data set presents a single source of truth, the platform can be configured to display that data in ways that are most meaningful for different users. For example, fund managers may want only an aggregate view of holdings while insurance portfolio managers may need more detailed views on asset allocations and risk profiles by region or issuer ratings.

Tri-party reconciliation

With the complicated world of trades, it is now more challenging for parties to reconcile their data against custodian data. With Clearwater Analytics, this problem is solved by aggregating and reconciling custodian data with 3rd party data.

The process supplies more accurate results. When data is compiled for one institutional investor into a security master, that data is validated and enriched against curated reference, risk, and market data.

As a result of this process, reconciliation becomes simpler, more efficient, and quickly aligned with emerging accounting practices. With Clearwater, businesses can manage and access their financial data and achieve real-time visibility, data consolidation, and reports from one system. That means improved compliance and speed-so you can answer key questions and make better decisions faster.

Trusted 24×7 availability

One of the most compelling advantages of moving to IaaS is the ability to make swift, quality decisions with up-to-date information. With live access to financial information, including exchange rates and positions, investors have the information they need to spot opportunities, avoid potential and optimize yield.

We provide our clients with access to the most up-to-date data available. With investment data at their fingertips, always on and refreshed daily, our clients can make timely informed decisions to mitigate risk and capitalize on opportunities that arise every day.

On-demand reporting

At Clearwater, our client data is available through an intuitive UI (user interface) that is easy to use across the entire organization. Real-time data is accessible within a few clicks. The solution provides flexible and dynamic custom reports that can be configured with drag and drop functionality.

We provide the freedom that smart businesspeople want and the stringent guidance they need. We help smart businesses run their business by providing them with comprehensive yet creative and completely customized financial reporting, in local GAAP or IFRS9 standards.

As a SaaS company, we take care of the report changes for always evolving standards and our clients focus on what they do best, finding the highest yield for their company. Every business has unique needs, so every report can be customized with a drag and drop interface.

There has never been a better time to move to the cloud

The digital revolution is liberating investors, who are now enjoying the automated services that enable heightened productivity and performance of their investment portfolios. Such an achievement would have seemed like a pipedream only a few years ago, but now investors are turning automation, together with other revolutionary technological trends, into a reality.

With Clearwater, you simplify your business with comprehensive financial consolidation and reporting that removes complexities from compliance and reduces costs.

A system that combines all your data and processes under one roof is vital for successful tactical and strategic decision making. Clearwater Analytics is an incredibly robust and scalable portfolio accounting solution for financial teams around the globe. It is built for true, real-time integration, supports any asset class, offers unlimited scale, and has proven to be a platform that is proven to improve investment accounting and reporting now and in the future.

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