How To Choose the Right Trust Accounting Software for Your Family Office

Eric Dunn
May 20, 2023

How To Choose the Right Trust Accounting Software for Your Family Office

Your family office already has a great accounting software, and everyone there taps into to manage the funds of your ultra-high-net-worth individuals.

We get it. QuickBooks is great, and it handles straightforward investments and normal accounting with ease. It has great reporting tools.

But can it handle the nuances and complexities of $100 million accounts?

QuickBooks can’t quite do everything when it comes to trusts.

Take a look at how to choose the right trust accounting software for your family office.

Why does my family office need trust accounting software?

Trust administration is complex. There are legal frameworks to follow, not just financial ones. You already understand the accounting and financial aspects of administering tens of millions of dollars.

But holding, receiving, and disbursing funds for your clients takes time and effort, even with the right accounting software.

How much money do you disburse in any given month? When do you disburse it? Into which bank accounts and to whom?

Are you following the stipulations of the trust? How much time does it take to change things in the trust account when one of the inheritors goes to court?

Accounting and financial software can only do so much. It may have trouble understanding the nuances of managing a trust with respect to the legal framework inherent in trusts.

Your family office can use the right trust accounting software to manage the details of trust administration.

Ask yourself some questions

Finding the right trust accounting software for your family office means asking the right questions to solve the pain points of your trust administrators.

  • Do your trust administrators talk about needing more time to do other tasks?
  • Do your trust administrators still input client numbers into Excel spreadsheets?
  • Do you wish your current accounting software could automate a few more tasks for your family office?
  • How much time do you think you could save by adding some important features to your accounting software?
  • How long does it take your staff to perform mundane tasks for trust accounting?

Perform a labor audit

Accountants love audits. Perform a labor audit for your family office staff with regard to their trust accounting tasks.

Have each person track the time it takes to do mundane tasks each week or month, including reporting, to see where you could save time.

Better yet, sit down with a trust administrator one day when he or she performs these tasks to get an idea of how long it takes.

If you could save 30 minutes per month per account on the reporting side of trust administration, how much time would that save your family office over the course of a year and multiple accounts?

The key comes from reporting

Your family office thrives on reporting and data, particularly when a family wants to see reports of how particular funds are holding up.

For example, the stock market loses 2,000 points in one week. Can your accounting software update the family on how much money was affected by the loss? Can the family make a decision on shifting investments to other assets if your staff can’t provide up-to-the-minute information?

It makes sense that when there is a drastic change in particular assets, whether it’s stocks, bonds, precious metals, commodities, or real estate, that your family would want to know how it affects their financial standing.

Having real-time reporting beyond just monthly reports that Quickbooks can run, gives your trust administrators an edge when you manage relationships with families who deserve to know the current state of their finances.

If you face delays in obtaining financial reports that don’t meet family expectations, what do you do then? Is the data reliable based on new events or changes? What happens when/if someone in the family passes away, and those assets need to go to someone else? How long will that happen?

If you feel like your reporting capabilities are lacking based on the needs of your families, then your family office needs more sophisticated software.

Having the proper trust accounting software can make complex situations simpler by giving you real-time access to all information, greater insights, and improved efficiency for your staff.

Situations where trust accounting software excels

Trusts for families are complex, even though your staff are experts in their fields. And you need all of the help you can get for unique situations.

Broad Range of Asset Classes

You already offer mutual funds, stocks, and bonds for family investments.

But what about private equity, investing in startups, or becoming angel investors?

These alternative investments may lead to complexity that’s challenging to manage with ordinary accounting software.

Multi-Generational Investments

How does your family office handle multi-generational investments? Can your basic accounting software understand who gets what and why based on a disbursement plan?

Multiple Custodians

Multiple custodians may want different reports delivered to their inboxes. One custodian may be more hands-on with trust administration, while others may not be. Having multiple custodians could make reporting confusing.

Manual Processes for Report Prep

Your regular accounting software might not handle integrating investment accounts with the rest of your family office in a timely manner. Having manual processes and reporting may create delays, data manipulation, or even fraud.

Budgeting & Forecasting Snafus

Analytics is the name of the game now. Current reporting simply isn’t enough. Families need metrics to help them forecast what their financial situation will be in a month or two. This lets your families make better decisions moving forward based on current cash flow.

How to align trust accounting software with your family office requirements

Adding the right trust accounting software to your arsenal doesn’t supplant QuickBooks by any means. However, it does give you certain advantages.

Obviating the Integration With Other Digital Tools

Integrating with other digital tools is great for your accounting software.

We see often see family offices that require integrations with:

  • E-Mail
  • Word Processing
  • Design Software (like Adobe, for making branded reports)
  • Bill Pay Tools
  • Expense Management Software
  • Payroll

Rather than managing all of these types of specialized software, why not have a trust accounting platform that doesn’t need integrations to handle your day-to-day aspects of trust management?

Comprehensive Reporting

Each family’s situation is unique. Not every family wants the same reports in the same format. That takes time when you create new designs and layouts manually while trying to highlight the metrics each family wants, so they can gain deeper insights into their finances and futurecasting.

The right trust accounting software for your family office consolidates results from all investment classes to provide real-time insights. It also improves financial management and planning.

Stronger Controls

Sophisticated reporting tools inherent within trust accounting software utilize built-in controls to help your administrators mitigate the risk of fraud or errors. You also save time during reconciliation processes every month.

Concerned About a New Setup? HWA International Can Help!

Are you worried about how your staff will react or handle going to a new accounting platform after they’ve spent years becoming wizzes at QuickBooks?

HWA International can give you an effective implementation plan that enables your family office to see the potential benefits of a more advanced accounting software package.

Talk to us today for more information, and we’ll see what we can do for you.

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