WHAT DOES A FUND ACCOUNTANT DO?
Published: Mar 12, 2025 – The Fund Accountant ensures the availability and accuracy of all necessary data for NAV calculation, including corporate actions and pricing, while preparing and reviewing fund valuations. This role involves reconciling daily transactions, analyzing cash flow activities, resolving discrepancies, and maintaining accurate asset and cash balances. The accountant also conducts audits, calculates performance fees, manages year-end distributions, and delivers timely, high-quality reports to support fund valuation processes.
A Review of Professional Skills and Functions for Fund Accountant
1. Fund Accountant Roles and Responsibilities
- Process and Reconciliation: Process and reconcile daily trade and cash activity for sub-billion fund complex
- Accrual Tracking: Take responsibility for tracking accrual activity
- Reporting: Perform daily reporting to portfolio managers and senior management
- NAV Reporting: Prepare NAV reporting and daily reports to senior management
- Investor Allocations: Prepare monthly investor allocations
- Fee Calculations: Prepare management and incentive fee calculations for multiple fees and class structures
- Distributions Review: Prepare and review monthly distributions
- System Implementation: Work with systems group to implement new reporting tools
- Financial Statements: Prepare year-end financial statements
2. Fund Accountant Responsibilities and Key Tasks
- Breach/Error Management: Create breach/error forms for pricing breaches and other errors
- Corrective Action Management: Manage corrective and remedial actions through to closure
- Risk-Based Approach: A risk-based approach to the work and a strong emphasis
- Governance Improvement: Maintaining and improving governance within the team
- Ownership and Accountability: Strong ownership of own work and tasks
- Distribution Management: Take responsibility for managing distributions
- Supplier Relationship Management: Manage relationships with external suppliers, including bi-weekly operational calls
- Business Change Support: Support and participate in business change
- Middle Office Support: Support other areas of the Middle Office team with their duties
- Customer Service: Ensure clients receive operational service and support consistent with the principles of Treating Customers Fairly
- Accounting Standards Awareness: Keep up to date with current and developing accounting standards
- Regulatory Compliance: Ensure Funds comply with relevant regulations and prospectus requirements from the Fund Accounting/reporting perspective
3. Fund Accountant Key Accountabilities
- Accounting Entries: Record all accounting entries and reconcile them to the investment database
- Trial Balance Monitoring: Monitor and review entity-specific trial balances
- Loan Interest Invoicing: Prepare monthly loan interest invoices
- Online Banking Management: Manage the online banking system, including wire transfer
- Vendor Payment: Make payments to vendors and liaise with the CPA firm
- Financial Statement Preparation: Prepare monthly financial statements
- Audit Support: Prepare documents and provide support to audit
- Tax Return Support: Prepare documents and provide support to tax return
- Cash Flow Reporting: Provide monthly cash flow and cash balance
- Bank Reconciliation: Responsible for bank reconciliation
4. Fund Accountant General Responsibilities
- Cash Reconciliation: Cash reconciliations and cash monitoring
- Portfolio Reconciliation: Take responsibility for portfolio reconciliations and investment of liquidities
- Financial Statement Preparation: Semi-annual and annual financial statements
- Audit Process Management: Take responsibility for the audit process
- Regulatory Awareness: Stays abreast of regulatory developments via newsflashes, webinars, conferences, and regular contacts with the fund industry
- Pricing and Valuation: Take responsibility for Pricing and Fair Valuation of Securities
- Performance Validation: Fund performance validation through benchmarking
- Complex Instrument Accounting: Accounting for complex instruments and derivatives
- Cross-Departmental Collaboration: Participates in cross-departmental projects and team initiatives
- Project Planning: Provides input to working group to establish project plan and processes based on defined business objectives
- Team Responsibility: Assigns responsibilities within own team and ensures both timely and adequate deliverables to project group
- Continuous Improvement: Mindset to challenge the status quo and propose more efficient processes
- Team Support and Guidance: Provides support and guidance to more junior team members
5. Fund Accountant Role Purpose
- Financial Reporting: Work as part of a team responsible for providing financial statements and accompanying footnotes for hedge funds, private equity funds, and closed-end register products
- Quarterly Reporting: Prepare and analyze financial reporting workbooks quarterly for clients throughout the year, with the addition of audited financial statements at year-end
- GAAP Compliance: Review and ensure financial statements comply with Generally Accepted Accounting Principles (GAAP)
- Accounting Research: Perform accounting research and analyze new accounting pronouncements as related to alternative investment companies
- Ad-Hoc Projects: Participate in ad-hoc financial reporting projects
- Fund Analysis: Analyze the operational structure and quarterly/yearly activities of funds with different investment strategies and products
- Automated Reporting: Help to create automated financial reporting solutions using advanced Excel skills
- Private Fund Reporting: Prepares quarterly and annual financial workbooks and financial statements for private investment funds
- GAAP Reporting Support: Assist in the preparation and review of quarterly GAAP financial reporting and investor capital statements for the private funds
- Audit Coordination: Annual audit coordination with the external auditors and assistance in the review and preparation of audited financial statements
- Investor Reporting: Assist with investor reporting and coordinate the capital call and distribution process with the 3rd party fund administrator
6. Fund Accountant Essential Functions
- NAV Preparation: Ensure all required data for producing the NAV are available and quality ensured (corporate action, pricing) and prepare the NAV for funds
- Transaction Reconciliation: Review and reconcile daily transactions of assigned mutual funds - analyze daily cash flow activities, reconcile assets and cash balances, and maintain a balanced cash account
- Discrepancy Research: Research discrepancies and investigate special or questionable transactions, i.e., trade corrections and corporate actions
- Client Liaison: Liaise with clients and internal staff concerning issues affecting the valuation of funds
- Audit Support: Perform additional audit checks to support the calculation of net asset values, analyze the increase or decrease of the net asset value of a fund
- General Ledger Reconciliation: Analyze and reconcile the general ledger to the sub-ledger and resolve outstanding issues on time
- Performance Fee Calculation: Calculate performance fees (if applicable) and investigate, document, and escalate issues/events
- Year-End Distributions: Prepare the calculation of year-end distributions of income, capital gains, and related tax issues
- Customer Service: Deliver quality customer service through timely and accurate report delivery
- Report Organization: Maintain client on-site reports in an organized manner and ensure all daily valuations reports are accounted for
7. Fund Accountant Additional Details
- Closing Process Management: Manage the monthly closing process with the 3rd party fund administrator for multiple entities, including operating expenses and account reconciliations
- Trial Balance Review: Perform review of monthly/quarterly trial balances prepared by the 3rd party fund administrator and identify and resolve issues
- Investment Accounting: Apply proper accounting treatment for various investments
- Accrual Accounting: Record income and expense accruals following GAAP
- Portfolio Valuation: Obtain portfolio valuations compliant with fund-specific pricing policy
- Documentation Review: Review source documentation/accounting reports to trial balance for accuracy
- Cash and Security Reconciliation: Reconcile cash and security positions to numerous custodians and prime brokers
- Discrepancy Resolution: Resolve accounting discrepancies and irregularities
- Interest Calculation: Calculate interest payments and maintain internal documents
- External Liaison: Liaise with external fund administrator, tax advisors, and lawyers, and maintain banking relationships
- Ad-Hoc Task Participation: Participate in ad hoc tasks as assigned by the department head