Do you really need integrated investment management software?
Whether your business has just made its first foray into the investment sphere or investing is its sole purpose, it's important to manage those assets in the most effective way possible.
If your company's sole mission is to manage portfolios for clients, as in the case of registered investment advisors (RIAs), it's likely you'll need to connect to one or more brokerage accounts. In this instance, a dedicated investment management software is probably the best fit.
If not, accounting software with robust integrated investment management capabilities, such as Gravity Software, may offer more flexibility and a wider variety of features, allowing you greater visibility into your investments and a greater diversity of investment types. Read on to find out whether this type of solution is right for your firm.
Are you currently using spreadsheets to manage investments?
If your business has multiple investments, you may quickly find you’re outgrowing spreadsheets as a management solution. It can be time-consuming to keep information accurate and up-to-date, especially when there are multiple purchase prices and selling prices involved.
Compare that with Gravity Software's investment sub-ledger, which calculates a weighted average share price for a particular investment based on your buying and selling activity. This gives you a standard measurement by which to easily compare your investments.
Are you experiencing limitations or frustrations with an on-premise system?
Investing can be influenced by events that take place outside the typical 9-to-5 workday.
Do you want to miss out on a major opportunity because on-premise server updates prevented your team from accessing the data needed to make a decision? Do you want prospective talent to pass on working for your firm in favor of another employer that offers remote work? Gravity Software is cloud-based, so employees can access it anytime, from anywhere, with no downtime for updates.
Does the same person or team handle both accounting and investments?
If your accounting and investments are handled by the same person or team, their job will be much easier if they don't have to switch between two different solutions.
Not only are employee morale and efficiency likely to improve, but integrated investment management software that comes part and parcel with your accounting software means it will be easier to get a complete picture of your company's finances.
Are you managing multiple investments within a single holding company?
Consider the example of a private equity firm that raises capital from a variety of sources and places it into 60-80 investments, including 26 investment companies. Should the firm exit from a particular company? Infuse funds into another? Add to their position on a particular stock?
These questions can best be answered through full transparency into all of the firm's investments. A dedicated investment management software might not be able to provide detailed insights into your portfolio companies – sales, revenues, profit margins, and more – the way an accounting software would. The best way to attain that level of visibility is through a multi-entity accounting software with investment management capabilities such as Gravity.
Do you need to manage investments in multiple currencies?
Because of the risks associated with foreign currency exposure, if you have global investments, it’s critical to have multi-currency accounting software. Unlike some traditional investment management software solutions, Gravity Software's multi-currency capabilities come as a default feature. With Gravity, you have the option to update exchange rates manually or do so automatically through an integrated service. You can automatically record realized and unrealized gains and losses due to exchange rate fluctuations, and you can complete deals in one currency while reporting in another.
Do you need consolidated financial reports?
If you are an enterprise with multiple investment accounts and/or portfolio companies, then the answer to this question is likely "yes." Consolidated reporting carries a myriad of benefits for a firm's stakeholders, including:
With consolidated reports, your enterprise's entire financial picture is in one place. You can zoom in or zoom out on that picture as much as you'd like. Just choose a set of parameters, such as total gains from private investments for a particular month, and that information becomes available with the click of a few buttons.
Consolidated reporting allows for side-by-side investments tracking, giving you the information you need to make better decisions. Compare the revenues and expenses of similarly-sized portfolio companies to determine whether any improvements could be made in the area of profitability, for example.
Gravity Software makes consolidated reporting a default feature using a shared chart of accounts. Financial information for all of a firm's holdings is stored in a single database, negating the need to copy information from each entity's database into a separate spreadsheet to create reports. It also means reports are in real time – a must in the fast-paced world of investing.
Is it important to have reports personalized to different stakeholders?
This is another question to which the answer is likely "yes." Every enterprise, no matter what its purpose, has a diversity of stakeholders. For a PE firm, for example, stakeholders include the firm's principals, limited partners, employees, and more.
Each of these stakeholders requires a different level and type of information, and Gravity’s integration with Microsoft Power BI allows for personalized dashboards so everyone has the data most relevant to their role with the enterprise.
Gravity gives you more
It would be inaccurate to say there are no use cases for a software strictly dedicated to investment management. Gravity Software, however, provides most of the elements of a dedicated investment management software along with much more.
With Gravity, you have the flexibility to make the best investment decisions for your stakeholders, whether that means acquiring portfolio companies, purchasing real estate, sticking with traditional investment vehicles such as stocks and bonds, or creating your own unique blend of investments.
You'll also be able to easily operate in multiple currencies, view granular details of your individual investments while monitoring the performance of your firm as a whole, and provide each of your stakeholders with the information most relevant to them.
Learn more about how Gravity’s accounting and investment management software help you maximize the performance of your portfolio.
Better. Smarter. Accounting.