One message that i heard loud and clear at the Technology Leadership Forum held in conjunction with the 2012 Technology Tools for Today Conference was that many firms, particularly larger ones, are struggling with their billing workflows and processes. Coincidentally, I was recently introduced to billPort, an application from Arcons Technology Inc. (http://www.arconstech.com/) that is specifically designed to address this.

For those of you unfamiliar with Arcons, the firm was founded in 1998 by Hemant More. More has extensive experience in the financial software field. His employment and consulting history includes stints at Advent Software, NorthStar (a firm that formerly produced enterprise-level software for financial services firms) and Wells Fargo Private Client Services. Arcons originally built products targeting Advent users, but the firm has since branched out and now makes products that are compatible with Schwab PortfolioCenter and in some cases Scottrade PortfolioDirector as well.

BillPort is a relatively new product. The original version was created for a broker-dealer with sophisticated needs that uses Advent Software for its portfolio accounting. BillPort is currently available for Advent AXYS, APX, and Schwab Performance Technologies PortfolioCenter. In addition to these versions, there is also a "disconnected" version. The difference between the disconnected version and the other versions is that the former can directly access the applicable Advent or PortfolioCenter database. If you use some other system, you can purchase the disconnected version and import position data from your portfolio management system in order to do the billing. Arcons has not ruled out creating versions for other portfolio management systems, and it is likely that the company would do so if there were sufficient demand.

When you begin using the system, your accounts should be in place. You can access them from the Accounts List icon, which allows you to view all open accounts, all closed accounts, accounts by manager and accounts by broker/advisor. In addition, there are icons that allow you to search accounts or view them by owner or account type.

The application is divided into three broad areas of functionality: Main, System and Import, each accessed through its own tab at the top of the screen. Each section has its own set of icons, which are arranged at the top of the screen by function. For example, in the Main section, the functions are Household, Accounts and Revenue. The household function area contains only two icons: New and List. Others contain more. The new icon is self-explanatory. When you click the list icon, a sub-menu appears offering a list of all open households, all closed households, households by billing group or households by last billing date. Most of the menus work in similar fashion.

When you select a list, it appears in spreadsheet format, providing the households requested. For each household, columns display the number of accounts in the household, the fee schedule name, the last billed date, the billing group, the household valuation and the last fee.

Obviously, to get to this point, you first have to set up your households and other schedules. To create a household, click on the New icon in the Household area. At the bottom of the screen that appears, you hit the "Add Accounts" button. A new screen appears with a list of all your accounts in spreadsheet format.

You can sort your accounts by any of the many columns that appear, including one for account numbers, one for the broker or advisor, one for the billing group, one that marks whether an account is currently assigned to a household, and many more. To search on multiple criteria simultaneously, you can click the "add filter" button to select up to 13 search criteria. Once you've done your sorting, you can select one account or multiple accounts for inclusion in a household. When you've made your selections, you type in a household name and choose a billing frequency from the drop-down list. My version offered choices of monthly, quarterly, semiannually and annually. You then select the month and/or day to bill. Billing date choices can be a fixed calendar date (such as the first of the month), a day of the week (such as the second Tuesday of the month) or a business day (such as the first business day of the month). You can also specify that it should be billed in advance, that the billing is in arrears, or that this account is excluded from billing.

Another drop-down list allows you to select the billing schedule for this household. A radio button allows you to specify how the billing schedule is to be applied to the accounts within the household (aggregated, averaged, treated separately, summed and prorated or aggregated at the effective rate). Finally, if one account is to be designated as the fee-paying account for the household, you can specify which account it is. Once you've set all the parameters, you save the household information using the applicable button.

As you may have surmised from the flexibility in applying fees, billPort has extensive fee customization capabilities. You can create an unlimited number of fee schedules, and apply them to one household or any number of households. If you wish, you can assign fee schedules at the account level, and thus apply different fee schedules to a single household. You can also create fee schedules linked to asset classes. So you can charge different schedules for equities, fixed income and cash.

Fee schedules can be as simple as a flat fee or as complex as a multi-tiered fee with a minimum fee and a percentage discount applied to the fee. In addition, one can specify any revenue-sharing arrangements. This allows you to track such arrangements and run reports on how the fees were collected and how they were dispersed.

All of the fee-sharing arrangements can be set up and monitored in the revenue area. The Sharing Rules icon launches a screen that allows you to create these rules using various formulas. Since some of these rules can apply to multiple entities per account, they can get complex. BillPort offers the ability to test rules so you can check the accuracy of rules/formulas here before you apply them. As an alternative, you can pay Arcons an hourly fee to set up the rules for you if you need them.

Once you've established the rules, you use the Fee Sharing icon to specify which accounts the schedule applies to. Other icons in the area include the Billing Session icon and the Compare Receipts icon. The former presents you with a list of every billing session you've run. The list includes information such as the billing date, the session name, the start and end time, the user who ran the session, the number of households that were billed, the number of accounts that were billed, the valuation and the fee. If you require further details, including a full list of accounts billed, the valuation for each account, the fee and the amount paid, you can display it by clicking the "details" button.

The "compare receipts" icon displays, for the period specified, the accounts that have been billed in one column and the fee that has been recorded as received in the portfolio management application in the next column. For example, if you've instructed Schwab, as your custodian, to debit the Smith XYZ account for $1,000, the custodian will send a file back to the portfolio management system confirming the debit when it occurs. BillPort allows you to compare the billed amount with the debit confirmation from the portfolio management system to ensure that they match.

The systems area allows you to further refine your billing parameters. For example, you can create fee types, so you can link a fee schedule to a type of activity such as administration, financial planning or estate planning. If your client agreements allow you to pass through costs such as delivery fees and account aggregation fees to clients, there is an icon in the System section that allows you to list the services performed, in detail, and apply the fee for that service to a household.

The Import tab is where you bring in the data you need from your portfolio management software. You can import positions, bill settings, UMA accounts, management fees and transactions.

Once all of your settings are in place, creating invoices and billing are relatively painless. If you want to invoice an individual household, you select the household from the household list icon, push the invoice button, and indicate that you want an invoice for the selected household. If you select multiple households, or if you choose to bill by billing group, you can specify whether you want to create one PDF incorporating the whole billing group, or one PDF per invoice. You can also create one PDF per broker/advisor. These PDF files can be customized to show as much detail as you like. The PDF files can be routed to your e-mail application, to a folder on your hard drive or to a Web portal. These PDF files can also be encrypted for security. This can be done on an individual basis, or on a batch basis using information that the client should know (for example, the first name of the primary account holder).

The application has many other features that are worthy of mention, including an approval workflow built in. It also maintains a complete detailed history of every invoice, including all the fee-calculation details.

Overall, there is a great deal to like about billPort. It is comprehensive and highly customizable. It is powerful enough to address the needs of a large firm, but it can work equally well for modest-size firms with complex billing needs that want to automate the billing process. It includes a one-click backup of your SQL database. This is very helpful if, for example, you've just completed a large billing session and you want to make sure you have an immediate backup of what you've just done. BillPort already has the capability to export data to one accounting package, and the company is currently working on an export to QuickBooks. When the QuickBooks work is done, it should further enhance the appeal of this application to many advisory firms.

There is, however, room for improvement. As of now, billPort is only available for local installations. If you host your own Advent AXYS or PortfolioCenter database, this will not be a problem; however, if you are already using a hosted portfolio management solution, billPort will not be as attractive to you. Hopefully, billPort will either offer a Web-based option, license its software to third-party PortfolioCenter and Advent AXYS hosts, or both.

The setup can be time consuming. Users have to add households manually. Advent AXYS does not support the concept of households, according to More, but he claims to have a workaround that he can provide on a consulting basis. 

The import and export of data between programs is better than manual data entry, but we'd eventually like to see direct feeds whenever possible between billPort and other apps. The pricing had not been set when we went to press, so it is impossible to comment on how cost effective this solution might be for small, medium or large firms.

Despite a few omissions that we'd like to see addressed, billPort impressed us. As we stated at the outset, many firms seem to be struggling with their billing workflows, and billPort can almost certainly help. It is powerful and customizable. It doesn't work with everything at this point, but it does work with a couple of the most popular portfolio management and accounting systems that independent advisors use. If you are looking for ways to improve your billing and fee-collection processes, we think billPort is worthy of your consideration.