CFATS (Customized Fund Accounting and Tax System) is an integrated accounting and reporting system. Initially developed for commodity futures accounting, CFATS has been expanded to support the unique accounting and reporting needs of today's funds and managed accounts. It streamlines the fund accounting process even for highly complex fund structures with many investors.
Although CFATS has been designed to automate the fund accounting process, its unique architecture also provides users with unparalleled flexibility. The key to this is the system's ability to segregate investors and financial data into an unlimited number of separate classes. Each class can then be dealt with separately or combined with other classes or subfunds for the purposes of data entry, fee calculations, income and expense allocation and report generation.
This makes it possible to allocate trading activity or other items of income and expenses selectively among classes. This functionality has many applications. For example, investors can be separated by fee schedule. Investment results can be allocated differently to different investors based on the type of transaction or placed in "side pockets" with are subject to different fee, liquidity or allocation provisions. Certain types of income can be accounted for on an aggregate basis while other income can be accounted for on by entering specific data for each transaction.
To enhance accuracy, the system contains built in checks and balances to prevent or flag most user errors. The combination of these features enables user to process their fund data with increased accuracy and speed and less staff time. In most cases, it is possible to produce investor statements and internal financial reports within a short period of time of the receipt of the final input data for a fund.
Unlike some systems that require a monthly closing that prevents later changes to the input data, CFATS permits users to change the data for any past period (but the data can be set to "locked"). It also permits multiple users to work on separate sub-funds for the same fund simultaneously. CFATS retains all data for each fund into perpetuity. As a result, data from any previous time period is always accessible from a central location. Although most funds require monthly or quarterly accounting, CFATS can also accommodate intra-month closes for the purpose of admitting or redeeming investors while retaining the ability to produce investor and fund level tax information.
The system can be run multiple times at any point in the month or day. This enables fund managers to calculated estimated results based on data available at a particular point in time but preserves the ability to add or change data at a later time. CFATS can also be run on a daily basis to create daily performance information or estimates. When run on a daily basis, the system will pro-rate fees as well as repetitive accruals through that point in the month.