The guide to using the new eRecs system. Here you will find the resources you need to troubleshoot.
eRECS gives firms significant benefits by streamlining critical pieces of its brokerage settlement operations; however, there is a fair amount of preparation to make use of the functionality. Firms deciding to on-board to the eRECS system will be sent the eRECS Set-Up Form which details the necessary information that needs to be sent to FIA Tech in order to start the process. Information requested on the form include firm accounting details, firm specific data (i.e. product and exchange codes, entity relationships etc.), invoicing details, and IT resource requirements. Once FIA Tech has received this information and confirmed all necessary details from the firm, the firm will move to the next stages of the on-boarding process.
An on-boarding firm will need to determine what external data flows will flow into their eRECS environment for brokerage reconciliation. A firm can choose to have Project Atlantis, GPS, and Manual Invoice data that is automatically uploaded into the system on a daily basis. Additionally the firm will need to determine what level of reconciliation and eRECS functionality they want to have. Any combination of the following can be chosen:
- Accounts Receivable
- Accounts Payable
- Manual Invoicing
If choosing to use eRECS for manual invoicing, firms must identify the brokers and clients with whom they wish to pay and collect. Once this is determined, the firm’s full eRECS environment can be set up and testing can begin in full.
In order to maximize the value of eRECS, firms must adopt a process that includes a daily trade and fee reconciliation. At the end of each day, a firm send file from their internal bookkeeping systems that represents their transactions and brokerage accruals. This file must meet the eRECS system requirements (details communicated when onboarding process begins) in order to be uploaded to the system. eRECS automatically reconciles transactions and changes to previously processed data daily, which is the quickest way to identify and resolve discrepancies. Within eRECS, firms can create “aliases” or tables that recognize data differences between external data flows and a firm’s accounting systems for exchanges, firms/brokers, product codes and account numbers. These aliases allow our system to correctly interpret codes in their accounting systems when comparing them to external data flows.
Standard Invoice Initiative
In the current environment of the brokerage industry there are a number of challenges that firms face when attempting to invoice one another. Firms have diverse internal accounting systems and invoicing processes. Differences in file types, formatting requirements, invoice fields, and reference data all contribute to manual invoice reconciliation being a time consuming, complex, and difficult task. Not only is each invoice unique but format changes are often made as well. This leads to reconciliation becoming a constant game of catch-up.
To combat these challenges, FIA Tech has produced and promoted the use of an industry wide Standard Invoice Format. When developing the Standard Invoice Format, FIA Tech determined that the following criteria needed to be met:
- Draw from a common lexicon
- Have low technical hurdles
- Allow for low floor, high ceiling
- Be future-proof
- Change infrequently, and then only predictably
With these criteria in mind the FIA Tech Standard Invoice Format was established. The Standard Invoice Format meets each of the criteria listed above:
- It uses ISO reference date, exchange defined product codes (common lexicon)
- It is in the .CSV format (low technical hurdle)
- It has 18 required fields, 53 available for increased precision (low floor, high ceiling)
- Accommodates next-gen brokerage platforms: Atlantis (future-proof)
- Change control by committee, regular biannual updates (Change infrequently and predictably)
Simply put, the FIA Tech Standard Invoice will help firms pay and get paid in a much more timely fashion. With formatting no longer part of the process, reconciliation is simplified leading to full invoice payment frequently within 60 days.