Advance Fee Billing Adjustments

Advance Fee Billing Adjustments

Advisors using Advance billing have the option to calculate retroactive adjustments to the fees already charged for the previous period. These adjustments can be triggered by inflows/outflows that exceed a threshold specified in the billing configuration, as well as by the opening and/or closing of accounts. The adjustment process is run on the day after the end of the period.

Billing Adjustment Process

For each account that meets a trigger criteria, the following process is used:

  1. The period is recalculated using the actual data from the period. This includes prorating accounts that were opened or closed during the period and using the actual market value data that reflects the effects of any inflows/outflows or market movement. As with the normal fee collection calculation, adjustment calculations can be based on the Period End Balance (ending market value), or on the Average Daily Balance.
  2. The new fees generated are compared to the fees originally produced using the projected values at the beginning of the period. An adjustment is created for the difference between the projected fee and the adjusted fee.
  3. The adjustment is added to the fee collection details and amounts of the next period.

To activate this feature and set your adjustment events, see Billing Settings for full details.

Changing Adjustments after a Billing Period Ends

At the end of a billing period, adjustment calculations are run and automatically locked. Changes to any billing information does not automatically cause adjustments to be recalculated. To recalculate advance adjustments:

  1. If you have not already Lock the Billing Period. Adjustments cannot be unlocked unless the billing period has been manually locked at least once first.
  2. Unlock the billing period. Unlocking the period after it has been locked triggers the system to look for advance fee adjustments.
  3. Make any needed changes that would affect advance fee adjustment calculations if you have not already.
  4. Wait until the next business day. Billing is recalculated every evening.
  5. Check that changes have been correctly applied and re-lock the period.

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