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Accusource LLC: Streamlining and Ensuring Timely Back Office Operations

Based on an interview with Ryan Kerry,
founder and CEO of Accusource LLC

Site: www.accusourcellc.com
Founded: 2008
Clients: RIAs, hedge funds, family offices, asset managers
Value proposition: Support of data processing, performance and reporting needs
The executive team: Ryan Kerry, founder and CEO
Belinda Micu, Chief Business Officer
June Scanlon, Chief Operating Officer

 

Accusource is a service company involved in outsourcing solutions for investment firms. Accusource solutions include back-office reconciliation, statement digitization, integration to the general ledger, portfolio accounting, and performance validation. Accusource LLC was established in 2008, but its co-sourced teams have experience in the industry dating back to 1986. For client companies, it’s practically impossible to train staff the way that Accusource can, regardless of their AUM.

Ryan Kerry, CEO at AccusourceRyan Kerry started as a bond trader in the mid to early 90s. Then he moved over to Advent for eight years, taking on various roles including consulting and custom development. In 2006, he moved over to SS&C to manage their outsourcing team. In 2008, he started Accusource with a focus on doing back office on the Advent platform. Today, Accusource has expanded its offerings from just running Advent Axys Apx for clients and now also functions as a staffing service.

In this post, we’re going to describe Accusource’s services in more detail to understand what makes them unique, how the company is organized, and what drives its success.

Accusource services

Accusource works widely with family and multi-family offices that serve ultra-high-net-worth (UHNW) investors. At the core of their business, they use SS&C Advent Axys Apx, one central, scalable platform for portfolio management, adding services and technology. Known for being customizable, this platform allows Accusource to run very complex processes with a lot of foreign currencies, options, futures, and custodians. Ryan says some of their clients have accounts with over 300 custodians.

“Accusource is focused on data. Be it for our eleven-year history of processing data for back-offices, digitizing statements, or GL integration, we make the data move faster, more efficiently, and we let the client focus on managing money and their clients.”

Back-office reconciliation is the first step Accusource takes for new clients. This means reconciling their portfolio accounting system each day with the data from the custodians. After that, Accusource can do many other tasks such as performance updating, report generation, new account processing, report fulfillment, and performance validation.

When digitizing statements, they take a document or an email and translate the data therein into the portfolio accounting system, thus streamlining transaction entry and data quality checks. Currently, they work with Smonik and Canoe solutions for this task. However, this process is never 100% automated; to eliminate mistakes, a human needs to audit the process to catch late or missing statements.

Accusource's staff
Accusource’s staff

Performance validation service is necessary for a number of reasons. For one, custodians are not always accurate. Their accruals can be wrong, and their corporate actions can process slowly. Also, in a family office environment, having an outside firm produce separate performance numbers can be extremely valuable and reassuring. If compounded across many accounts and custodians, these issues can have a significant impact on performance. So, for clients that aren’t GIPS-verified, Accusource has AccuVerify solution, which audits data at a granular level.

“GIPS verifies your composites, AccuVerify verifies your accounts. We do the grunt work involved in getting the GIPS data ready for verifiers and taking that burden off our clients’ shoulders.”

Also, Accusource provides a portfolio accounting solution that extends to integrations with other accounting, reporting, and trading applications.

General ledger integration by KnowLedger

KnowLedger, a service that integrates portfolio accounting transactions and gain and loss information into general ledger (GL) journal entries, is unique in the market, Ryan says. The other tools in the market that can do this are owned and run by family offices:

“There are all-in-one solutions that offer a system that is both the portfolio accounting solution and the GL. They compete with KnowLedger in that they transform data from systems into the GL. We can work with any portfolio accounting system and any GL. The client can choose or even change systems, KnowLedger can move the data between them.”

KnowLedger Accusource

Today, family offices continue to expand their focus toward real-time consolidated reporting, defining a clear mission and purpose, and negating cybersecurity risks. KnowLedger is purposefully built to address these needs. Historically, accountants have entered data into the GL via a slow, error-prone process that wastes their time. KnowLedger can quickly, frequently, and accurately move data into the GL.

“Many family offices input data into their GL weekly or monthly as a very summary level. KnowLedger can sync the data immediately and daily with more detail.”

KnowLedger runs on a rule-based engine called Decisions. The system does not use machine learning, but it’s able to be applied to a great number of situations. It’s designed so that the client picks the tools (e.g., Black Diamond, Addepar, etc.) and the general ledger, whereas the company builds the process in between.

Onboarding process and security

Onboarding for Accusource is very involved. It can take as short as two weeks for one client and as long as four months for the other. KnowLedger onboarding is especially involved and time-consuming as they have to write all the rules.

“We’ve found that no firm will be able to provide a file, sheet, or example of all the rules that need to be written, only consuming the transactions will suffice.”

Accusource does not host any client information. It acts as a user and can log in to any server or location. That’s why their main exposure to the clients is their usernames and passwords. To make sure that clients’ accounts are safe and sound, they use an encrypted password vault.

“We do not have data, and that sounds a little crazy, but we purposely build everything we do so as we don’t have the data. In the Apx environment, the client has the data, [and] we’re a user. So we have a partnership if the firm wants to host Apx somewhere else.”

Accusource’s structure and teams

Backstage, Ryan and his company have interface mapping experts but not a pure engineering team. There are twenty-four employees, each of whom has deep domain knowledge and works closely with all partners to build new tools.

June Scanlon, COO at AccusourceJune Scanlon, Chief Operating Officer at Accusource, leads four teams that work with clients. Three are operational, and each client gets assigned to one of these teams when they start with Accusource. Ryan says that this structure is very efficient because there’s always a backup; people inside one team know the client’s processes and can replace one another.

The fourth team is different in that it works predominantly on KnowLedger. It comprises very experienced staff who focus on building interfaces and leading development. That team processes new items and ideas that driving digitization.

Challenges and plans

There are several challenges that Accusource encounters. Among them, KnowLedger is very new, despite the fact that the company has been doing GL-related work for decades. Many accountants feel that they add value to the process by entering data themselves and hand-checking it as they go, but Accusource knows that their knowledge could be much better utilized elsewhere:

“We are attempting to eliminate this hurdle by educating the industry [that] a rules engine is much more efficient, faster, and able to do much more than even the best accountant. The accountant can review and audit the results.”

Ryan says that they continually strive to find new applications with which to integrate. For their first eight years, they were 100% focused on the Advent suite of products, but now, they are expanding to data-based solutions that are focused on a chosen niche.

“Our sweet spot is the firms from $500 million to $10 billion in assets. [Whereas] that [might] seem like a wide range, it’s actually rare for a firm like ours to focus on a range like this.”

Ryan personally derives motivation from seeing his staff grow:

“You just think back like, ‘Oh, my goodness. A year or two ago, that person didn’t know anything.’ A lot of times, that person will come up with something, somebody like me sitting here for twenty-five years never thought of. That’s just because they have a new perspective on the issue or workflow that us, old timers, never saw.”

Takeaways

Time is an extremely valuable resource, especially for businesses in the financial arena. Streamlining time-consuming processes can help them accelerate their growth and give a jumpstart on innovation.

 

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