This could involve adjusting the bill for large contributions or withdrawals during the billing period, or billing in a currency other than the portfolio currency, or any number of other reasons.

There are equally numerous causes for errors in the bills such as Incorrect setup of billing parameters and “as-of” transactions after the bill has been generated

In addition, the account opening process itself involves multiple departments within the firm, and typically involves Sales & Marketing, Operations, Corporate Finance, and Legal & Compliance. There are data setup and integrity issues thrown up by the presence of disparate portfolio accounting applications and billing applications. All these factors could lead to a significant number of “manual” bills that are generated. In addition to the delays and scope for errors created, such a process is also extremely difficult to manage from an audit and control perspective.

Billing Management System (BMS) gives complete solution for this.

PRODUCT OVERVIEW

 ENVIRONMENT
BMS is designed to obtain basic account hierarchy and month end balance information from one or more underlying portfolio accounting systems. BMS provides additional billing related information, Billing rules and invoice templates. Using this, the system performs accruals, calculate invoices, review and release invoices, and to create extracts to accounting, A/R and MIS systems.

BMS uploads new account information on a daily basis. All account balances are month-end balances. Account balances for any given month can be uploaded many times – initially at the month-end itself, and subsequently if there are any changes to the balance. BMS also provides for uploading balances as “provisional” balances, and then subsequently uploading a “final” balance that has been reviewed and approved.

Once the basic account information has been uploaded to BMS, additional billing parameters can be entered directly into BMS in the form of billing rules. These rules define the calculation and billing frequency, in-advance or in-arrears billing, the asset bases (e.g. billing based on period starting assets, ending assets, or different flavors of average asset balance), minimum and maximum billing limits, discounts, and various other parameters that define the billing requirements.

BMS then provides functionalities to manage both the monthly accruals process as well as the billing process. It provides for auto generation and release of invoices at scheduled periods, selectively “holding” accounts for review prior to releasing the bills, as well as adding adjustments to the bill. Numerous work-flow notifications are also included to facilitate operations.

OPERATING CYCLE
The following schematic diagram describes the Billing Operating cycle.

KEY FEATURES

HIERARCHIC MODEL

BMS supports definition of an ACCOUNT, PORTFOLIO, PORTFOLIO-SEGMENT, security levels. The balances are summed up and stored at the portfolio-segment level , and security level balances are uploaded only for the particular securities required for the billing calculations.

Billing rules can be defined at the client, account, or the portfolio level. The rule applies to all entities that roll up to that level.

IMPORT PROCESS

BMS imports account information and data balances from any number of Portfolio Accounting Systems through batch submission- Daily and Month-end. Account Repository of BMS stores such information. This is the primary function of BMS, as all other business processes like Billing, Fee and Accrual calculations are based on this.

FLEXIBLE FEE DEFINITION AND PRESENTMENT

BMS allows definition of any number of rules for an account, and therefore, any number of fee types for an account. Each rule can specify it’s own calculation and billing frequency, asset basis, minimum/maximums, discounts, and so on. Each fee can be charged to the clients in multiple ways such as direct deduct, hard-copy invoice, etc. Each fee can be presented in a separate invoice, or multiple fees may be combined into one invoice for presentment to the customer.

Any number of formats can be defined for an invoice, and BMS can be configured to automatically send additional copies of invoices to other addresses.

ACCOUNT AGGREGATION

BMS provides and supports definition of a RELATIONSHIP that links multiple accounts. Billing rules can be defined at the relationship level also, and BMS will aggregate assets across accounts for the purposes of determining the appropriate billing rate. This allows customers, whether institutional or private client, to pool their assets to obtain a more beneficial billing rate.

BILLING SEGMENTS

BMS allows upload of portfolio balances by segment. Therefore, it provides flexibilities such as excluding CASH from the billable assets, or in applying certain functions only to the Equities portion of the portfolio, and so on.

CASH FLOWS

BMS allows upload of cash flow information (contributions and withdrawals) from the underlying portfolio accounting system. Portfolios can be marked to reflect the impact of these Cash flows on the invoice in multiple ways. An account can be marked to always adjust for cash flows, to never adjust for cash flows, or to selectively adjust only if the cash flows exceed a defined threshold. All system adjustments are notified via work-flow to the concerned account owner for review and approval prior to release of the invoice.

CUSTODIAL BALANCES

BMS allows data entry of account balances as reported by the custodian. The account can be set up to calculate bills based on these balances rather than on the balances uploaded from Portfolio accounting system.

AUDIT AND SECURITY

BMS provides for a flexible setup of users and groups, and allows different access levels to each group for all functions provided. In addition, an audit trail is maintained of all maintenance activity as well as any adjustments done to billing parameters or invoices for audit control purposes.