Does your family office’s technology help or hinder?

Is your family office’s wealth management technology helping or hindering? That’s the question family offices should ask as the next generation of ultra-high-net-worth (UHNW) individuals take the helm.

While many family offices still run critical processes via paper shuffles and couriers, new generations are taking over leadership—generations raised on the internet, mobile phones, and laptops. These incoming generations are interested in additional services—like accounting and AP automation—that can make their lives easier while providing more actionable data for decision-making on the go.

AP automation for family offices

Francis Botha, founder of Simple, a family office insight and strategy company, wrote in Forbes: “Suffice it to say, accounting is not for the faint-hearted, but as the family office industry continues to evolve and professionalize, there’s light at the end of the tunnel for managing these key operations—thanks to some innovative service providers.”

BILL is one of the innovative service providers he identifies.

“When talking about accounting, making and receiving payments is a cornerstone component. With a dedicated provider such as BILL, family offices can streamline these activities. Instead of manually entering and approving bills, these solutions can handle large payments safely, while consolidating all relevant records and audit trails,” Botha explained.

Simple recently published its Family Office Software & Technology Review 2022, which collaborated with leading service providers to identify trends and how technology addresses them for family offices. Some trends mentioned include generational shifts and digital transformations that impact family offices, as well as the growing need for operational efficiencies.

Benefits of modern technology for family offices

The current mindset within many family offices is that enterprise-scale solutions are required to automate operations across functions and departments—especially when it comes to accounting and bill pay.

In fact, many cloud-based and cost-effective solutions can seamlessly integrate to support end-to-end, automated workflows. For firms that operate with this type of modern technology, the value is widespread, and benefits can include:

• Attracting younger generations of high-net-worth individuals: While older generations often conducted business based on paper, younger, tech-savvy heirs prefer digitally driven operations that are accessible anytime, anywhere.

Consider bill payments. Many family offices mail bills and paper checks to UHNW individuals. They then must sign numerous checks and have them delivered back—an inefficient process that takes days to complete, lacks security and an audit trail, and is highly manual.

With BILL, clients can review and approve bills from mobile devices and apps. And the family offices can pay online, have a complete audit trail of each transaction, and know exactly which bills are outstanding and which ones have been paid.

• Providing a single source of truth: When systems are integrated, it offers a single source of truth and full visibility to accurate, real-time data and insights.
• Recruiting the next generation of professionals: The new age of wealth management is upon us, and qualified staff demand digitally driven, agile work environments. Firms that want to attract and maintain the best-of-the-best talent must offer automated, digitized, and flexible work environments.
• Maximizing resources: A recent report found that family office professionals feel they spend 42% of their workweek on manual processes. Automation and integrations can significantly reduce manual work, allowing talent to reinvest their time in more important endeavors for their clients.

Common AP challenges family offices encounter

A way to evaluate your family office’s technology is to understand some of the core challenges commonly faced when it comes to accounting and bill pay.

First, many family offices lack standardization, according to Chirag Nanavati, Managing Director at Asset Vantage in this blog post. Asset Vantage, a partner of BILL and a provider of performance reporting and general ledger technology for family offices, is also a leading provider named by Simple, and it integrates with BILL. The organization has more than 300 high-net-worth clients using its technology.

He comments that, “When you don’t run your family office like an organized business, processes become people-dependent. This means that processes are dictated by whoever is handling the work instead of all staff following a defined and standardized workflow.”

Automation can support a uniform workflow by reinforcing a formalized process for bill intake, review, approval, and payment. This significantly reduces manual work and a lack of visibility when it comes to bill payments.

It also helps ensure the right bank accounts pay for the right bills. Instead of working with a spreadsheet to track AP, bill pay is digitized, organized, automated, and transparent in one cloud-based solution.

A second critical challenge is security. Each paper check prominently displays accounting and routing numbers and the account holder’s signature—all the information needed to commit fraud. Paper checks can often be delivered to the wrong address or get lost in the mail, increasing the odds of fraud.

When AP is digitized and automated, it enforces proper review workflows and provides an audit trail. It limits access to bank accounts while enforcing important security standards like multi-factor authentication. Payments are also sent through a BILL account, further reducing exposure for UHNW bank account information.

Here’s how family offices can learn more about AP automation

The modern age of wealth management is here. Do you have the technology in place to support digital, standardized workflows and elevated efficiency firm-wide? The time is now to make the move.

Find a checklist for evaluating new family office technologies here. You can learn more about BILL by requesting a demo today.