PORTFOLIOCENTER. Learning Guide: Reconciling Your Share Data

Transcription

1 PORTFOLIOCENTER Learning Guide: Reconciling Your Share Data

2 Document ID: SPT Document Date: June 10, 2014 Document Version: 1.0 For institutional audiences only Schwab Performance Technologies ( SPT ). All rights reserved PortfolioCenter and PortfolioCenter Hosted are products of Schwab Performance Technologies ( SPT ). SPT is a subsidiary of The Charles Schwab Corporation separate from its affiliate Charles Schwab & Co., Inc. ( CS&Co ). CS&Co is a registered broker-dealer and member SIPC that provides brokerage services, while SPT licenses software and provides related technology products and services. SPT and CS&Co are separate companies affiliated as subsidiaries of The Charles Schwab Corporation, but their products and services are independent from each other. SPT's intelligent integration solutions integrate data about accounts custodied at CS&Co. Schwab OpenView Mobile displays data about accounts custodied at CS&Co. Independent investment advisors are not owned by, affiliated with, or supervised by CS&Co. Individual names, account numbers and contact information listed in this document are fictional and not intended to reflect any existing individuals. Both real and fictional securities are listed in the document. Securities and strategies reflected in the document are for educational purposes only and are not, nor should they be construed as, recommendations to buy, sell, or continue to hold any investment nor do the accounts listed reflect individual securities accounts or holdings. Any similarity to an existing individual or account is purely coincidental. Screen shots are provided for illustrative purposes only and have been abridged. i

3 TABLE OF CONTENTS WHY SHARE RECONCILIATION IS IMPORTANT 1 UNDERSTANDING THE SHARE RECONCILIATION REPORT 1 READING THE REPORT 2 CUSTOMIZING THE SHARE RECONCILIATION REPORT 3 PRINTING ALL PORTFOLIOS 4 DISPLAY MISSING PORTFOLIOS 4 ARRANGING PORTFOLIOS 5 PRECISION FOR QUANTITY COLUMNS 6 RECONCILING CERTAIN ACCOUNTS 6 RECONCILING YEAR-END CASH INTEREST PAYMENTS 7 SHARE RECONCILIATION TIPS AND BEST PRACTICES 8 Learning Guide: Reconciling Your Share Data ii

4 WHY SHARE RECONCILIATION IS IMPORTANT Share reconciliation is one of the most important steps in your day-to-day operation of the interface. The share reconciliation process verifies the data you have posted into the database is accurate and complete. Share reconciliation compares cash and share quantities in PortfolioCenter with the quantities on record at the custodian. Share reconciliation is important because unreconciled positions affect: Performance reporting if you are missing part of the position, the return for that position and asset class can be skewed. Missing positions can also skew the return for the entire portfolio. Tax estimation reporting if you are missing part of the position or have a doubled position, the cost basis and/or tax lot information is incorrect. Important The custodian should be used as the source of record for tax reporting. Unrealized and realized gain/loss figures from PortfolioCenter should only be used as estimates. All reports displaying cost basis information should contain a disclaimer directing the client to the custodian s 1099 for tax reporting. Future transactions if you are missing part of a position, future transactions might not post correctly. Sells and dividends, for example, may receive transaction error and warning messages that can prevent those transactions from posting properly into the database. See the Interface Troubleshooting File Conversion Tool for more information about specific error messages. Client billing if you are missing part of a position or a position is doubled, the portfolio value upon which you are billing the client is incorrect. Note Share and cash balances can differ from your custodian for many reasons. Common reasons include missing transaction data that was either blocked or not posted from the interface files, missed downloads, and transaction data that was edited or canceled after being posted from the interface. UNDERSTANDING THE SHARE RECONCILIATION REPORT The key to successful share reconciliation is understanding the information displayed on the Share Reconciliation report. Although the Share Reconciliation report provides a wealth of information, some aspects of your data cannot be ascertained. The table below shows what information is available on the Share Reconciliation report: INFORMATION AVAILABLE ON THE REPORT Unposted transaction files Share variances Cash variances Missing Portfolios INFORMATION NOT AVAILABLE ON THE REPORT Unposted security, price, portfolio or position files Missing or incorrect cost basis Missing or incorrect market values or prices Portfolios that have never been downloaded through the interface Note Missing portfolios do not display on the Share Reconciliation report by default, however, you can change the report setting to always display portfolios that do not appear in the share reconciliation file. See the Customizing the Share Reconciliation Report section for more information about using this setting and an example of displaying missing interface accounts on the Share Reconciliation report. Learning Guide: Reconciling Your Share Data Page 1 of 8

5 WHY SHARE RECONCILIATION IS IMPORTANT READING THE REPORT The following information describes the sections displayed on the Share Reconciliation report so you can easily find the information you need. REPORT AREA OR COLUMN Non-Posted Transaction Files Symbol Description Type Quantity PortfolioCenter Quantity Quantity Difference DESCRIPTION This section only appears if you have transaction files in a status other than Posted prior to and including the reconciliation date. It is at the top of the report because it is the first thing you should address in the reconciliation process. The portfolio description (or name) and the symbol of the unreconciled position. The description of the unreconciled security. Use the description column, in conjunction with the symbol column, to find securities that might have the wrong symbol, but the same security description. The portfolio account number and the security type of the unreconciled security. The amount the custodian included in the reconciliation file for the security. For example, the Quantity column displays the number of shares that should be in the account for equities, mutual funds, and user-defined securities. For cash, it displays the amount of cash the custodian has on record for the account. The actual quantity in PortfolioCenter. The PortfolioCenter Quantity minus the custodian quantity. If the number is negative, the PortfolioCenter position is less than the custodian s position. If the number is positive, the PortfolioCenter quantity is greater than the custodian s position. Learning Guide: Reconciling Your Share Data Page 2 of 8

6 CUSTOMIZING THE SHARE RECONCILIATION REPORT Customizing the Share Reconciliation report can help you get the information you need to complete the reconciliation process. This section of the guide teaches you how to access the report settings and how to customize each setting. Some of the most common customization techniques you ll find in this document are: Displaying a list of all portfolios included in the file by printing all portfolios. See the Printing All Portfolios section starting on page 4 for more details on using this feature. Displaying missing portfolios or portfolios that are omitted from the reconciliation file. See the Displaying Missing Portfolios section starting on page 4 for more details on using this feature. Changing the way portfolios appear on the page by arranging portfolios by either account number or description. See the Arranging Portfolios section starting on page 5 for more information about using this feature. Setting the precision for quantity columns so you can reconcile mutual funds more efficiently. See the Precision for Quantity Columns section starting on page 6 for more information on using this feature. Limiting the number of portfolios that appear on the report so you can focus on a few at a time. See the Reconciling Certain Accounts section starting on page 6 for more information on using this feature. Including year-end cash interest payments so you can reconcile your accounts with current data. See the Reconciling Year-End Cash Interest Payments on page 7 for more information. To access the report settings: 1 Click the Interfaces tab. 2 Select the appropriate share reconciliation file date. Tip It is best to reconcile to the most recent date available. If you are up to date with your reconciliation, the most recent date gives you the best reconciliation point, and the file includes transactions through the most recent date. If you have never reconciled or have not reconciled in some time, the most recent date gives you all of the reconciliation issues at once. You may need to work with the file for several days until all of the issues are corrected. Once you have reconciled for the selected date, you can move forward. 3 Click the Report button to convert the file. 4 Click the Report Settings button to see the customizable settings. Learning Guide: Reconciling Your Share Data Page 3 of 8

7 CUSTOMIZING THE SHARE RECONCILIATION REPORT PRINTING ALL PORTFOLIOS By default, the Share Reconciliation report only shows out of balance positions. However, you might need to see all the portfolios included in the reconciliation, regardless of reconciliation status. To do this, uncheck the Print Only Unreconciled Accounts box in the report settings and then rerun the Share Reconciliation report. Below is an image of the report with the setting unchecked. DISPLAYING MISSING PORTFOLIOS By default, the Share Reconciliation report only displays portfolios in the interface reconciliation file. However, you can also display all accounts on the report, even if they are not included in the interface file. This allows you to identify accounts that are potentially missing from your interface downloads. To show all portfolios that should appear on the Share Reconciliation report check the Include Missing Accounts box in the report settings and rerun the Share Reconciliation report. Below is an image of the report with the setting checked. Note If the account is missing but should be in the file, contact your data provider to find out why the account is missing from the file. However, if the account should not be on the report at all, check the account mapping table for the interface. For more information about editing the interface mapping table, see Working with Interface Mapping Tables. Learning Guide: Reconciling Your Share Data Page 4 of 8

8 CUSTOMIZING THE SHARE RECONCILIATION REPORT ARRANGING PORTFOLIOS By default, the Share Reconciliation report is arranged by portfolio name. However, if you prefer, you can arrange the portfolios by account number. To rearrange the portfolios open the Share Reconciliation report settings. Click the Name setting to the right of the Arrange By setting and select Account Number from the list. Rerun the Share Reconciliation report. Below is an image of the report with the setting selected. Learning Guide: Reconciling Your Share Data Page 5 of 8

9 CUSTOMIZING THE SHARE RECONCILIATION REPORT PRECISION FOR QUANTITY COLUMNS Changing the Precision for Quantity Columns setting does not affect reconciliation status it is a reporting feature. For example, if the precision for quantity columns setting is set to 3 and the position is out of balance by.0001 share, the position appears on the report with a quantity difference of 0. By default, the precision quantity shows 5 decimal places. To change the precision quantity on the Share Reconciliation report click inside the box to the right of Precision for Quantity Columns and enter the number you want. Below is an image of how the report looks after changing the default Precision for Quantity Columns setting to 3. RECONCILING CERTAIN ACCOUNTS By default, the Share Reconciliation report runs against all accounts in the reconciliation file. From time to time, you may want to change the setting to focus on only one account or a small sub-set of accounts. Running the report on fewer accounts can also make it run faster. To run the Share Reconciliation report for a smaller group of accounts, choose the Select Portfolios or Portfolio In the Set options. Learning Guide: Reconciling Your Share Data Page 6 of 8

10 CUSTOMIZING THE SHARE RECONCILIATION REPORT RECONCILING YEAR-END CASH INTEREST PAYMENTS Each year, some custodians post money market interest as of December 31. Anytime the 31st falls on a weekend, the interest payments are not included in the PortfolioCenter cash balance on the Share Reconciliation report by default, causing reconciliation discrepancies. To address this issue, run the Share Reconciliation report as of the date of the cash interest payments. Select the last reconciliation file for December (12/29 or 12/30). You can either click the Run Report button, or you can right-click on the date and select the Report menu option. Change the date in the Reconcile accounts with PortfolioCenter holdings as of field from 12/29 or 12/30 to 12/31, as shown on the right and then continue with the process of running the report. Learning Guide: Reconciling Your Share Data Page 7 of 8

11 SHARE RECONCILIATION TIPS AND BEST PRACTICES There are best practices for share reconciliation that will help you stay on track and work through the reconciliation process most efficiently. Use the following checklist as a guide. Use the Share Reconciliation report every day you receive one Most interface custodian and data providers issue a daily share reconciliation file, and it is best to use this file daily to minimize the number of transactions and the amount of data you have to review to correct an issue. Review and correct any non-posted transaction file dates A non-posted transaction date (in a status of New, Error or Partial) indicates there are transactions that are missing from accounts in your PortfolioCenter database, and can appear on the Share Reconciliation report. Ensure all data from the day is posted before beginning with the share reconciliation. If there are transactions in the transaction file for that date that cannot or should not be posted because they are errors, or can be handled more effectively with a wizard (such as the Corporate Actions), block them so they do not appear as a non-posted transaction file. Reconcile share variances first Sometimes, correcting share variances will also correct cash variances because of the dual-entry of buys, sells, and income. Any incorrect data in one of these types of transactions could affect both share and cash balances. Reconcile cash variances last Generally, if you have followed the best practices up to this point, cash variances should be the only remaining items on the reconciliation report. Start with amounts that appear for more than one account or appear to be rounded amounts. Learning Guide: Reconciling Your Share Data Page 8 of 8