Automated fee billing-no longer just nice to have

Investment management firms spend a great deal of time and money improving their operational architecture, though often stop short when it comes to a key area affecting revenue management – client billing. However, industry drivers combined with the changing needs and expectations of investors have created the need to enhance transparency into billing. Delaying the automation of the billing process is no longer an option.

Industry drivers include the sharp rise in transaction volumes as well as the growing complexity of investments and fee structures that asset managers are required to handle. This is caused in part by the globalisation of the industry, and also by the nature of the investments. It seems that savvy investors are increasingly looking to invest across a range of products including cross border. This means that fee structures must be able to handle diverse asset classes and currencies, in multiple languages.

Asset managers are therefore faced with making increasingly complex calculations based on a widening range of fluctuating data, from fixed management fees to fees that incorporate performance based calculations. Exemplary client service is a key consideration also - asset managers are working to regain the trust of their clients, many of whom may have been burned in recent years, and businesses must now be acutely aware of the negative impact associated with inaccurate billing and incorrect charging. In addition to this, investors now expect a more personalised service – asset managers cannot stay competitive with a one-size-fits-all approach – the ability to evaluate and accurately bill for innovative services is central to attracting and retaining clients.

Upgrading manual spreadsheets to automated processes does not only benefit investors. The hidden losses associated with under billing or failing to bill can be hugely detrimental to an organisation. In addition, significant reductions in resource and infrastructure costs can also be realised with a more effective billing service, not to mention a reduction in damage due to revenue leakage.

Effective revenue management is crucial to asset management companies that are seeking to grow. Automated billing will generate improvements in service and enable investment firms to focus resources on what is most important — clients and partnerships.