Financial organizations are pressured to shorten monthly reporting timeframes to achieve operational efficiency and reduce the time to produce detailed financial summaries. However in doing so, processes need to be created to ensure that information is timely without creating operational risk through inaccuracies in the data.
Financial statements concisely outline financial activities of a business, individual or any other entity presenting financial information. To automate this production in a timely and accurate manner, fund companies and fund administrators require advanced investment accounting systems. For United States mutual funds operating under the SEC 1940 Act ('40 Act), daily net asset values (NAV) are produced on a trade date +1 (TD+1) set of security positions and market values. This means that these trades are processed on a TD+1 basis falling into the proper NAV period. The industry seems to accept that a fund's portfolio data (positions, transactions, and ledger postings) are not current on any given business day. However, this is not true for monthly, quarterly, semi-annual, and annual reporting periods. In month-end reporting, trades that occur on month-end-typically included next day-are required to be included in month-end reporting.