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Painless reconciliation

10/19/2008

Permalink 09:02:03 am, by Dana Comolli Email , 431 words   English (US)
Categories: Reconciliation, Accounting, Futures Trading

Painless reconciliation

Any CTA with managed accounts knows that one of the most time-consuming aspects of the job is reconciling your books and records with those of your clearing brokers. This becomes an especially arduous task when you have clearing relationships with multiple brokers. It seems that no two brokers have the same statement format, use the same symbology, or adhere to a consistent price convention.

What makes things even more frustrating is that most of the effort is spent reviewing trades that are correct in order to locate the ones that are wrong.

TheBooks reconciler automates this process and presents you with the trades, positions, and balances that do not agree, eliminating the tedious process of manually locating discrepancies.

Statements, not data files

TheBooks reconciler reads human-readable statements, not data files. This allows you and the software to use the same source when reviewing the information provided by your brokers.

In addition, TheBooks automatically organizes, encrypts, and compresses your statements and saves them within its database providing a single point for backup. It also includes facilities for exporting your statements onto disk in an organized fashion allowing you easily prepare for audits.

A three step approach to data extraction

TheBooks reconciler goes through three phases in preparing the data on a broker’s statement for use in the reconciliation process. These steps are outlined below:

The third step, validation, is what converts the data from the various standards that exist on broker statements into the standard you have defined in TheBooks. This step uses what are known as statement symbols to translate and, if required, re-value symbols and prices and is based on the settings you configure. In this way, TheBooks performs standards-independent data transactions from the broker statements into the format you desire.

Only the issues

When you ask the reconciler to look for differences, it only shows you the trades (or positions, or balances) that are different. You then spend your time resolving the issues; rather than looking for the issues. In addition, TheBooks reconciler maintains a list of open trade breaks and includes them on any break sheet you send to your broker.

As missed or extra trades are corrected on your statements, they are automatically removed from the list of open breaks. Price corrections are also detected and reported.

Sample confirm breaksheet

Summary

TheBooks reconciler’s ability to read the same statements you read, convert the symbology and price conventions to your standard, and to present you with only the issues, makes it an invaluable tool for the CTA with managed accounts.

For more information, see TheBooks Reconciliation at www.dmaxx.com

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