Missing or odd account values at billing time: what a small RIA should check before charging
When an account's value is missing, zero or looks wrong at billing time, a small RIA should not bill on it until it's explained. Check the usual causes first: a transfer still in progress, a closed or newly opened account, a security priced late, or a file that didn't load fully. Hold that account's bill if needed, bill the rest, and record what was found and when the held bill was sent. Never estimate a value without a written method agreed in advance.
The billing run is ready, except three accounts show a value of zero and one shows double what it did last quarter. It's tempting to bill the rest and quietly fix those later, or worse, to bill them as shown. Odd values are usually explainable in a few minutes. Billing on them without checking is how refunds and awkward calls start.
What usually causes odd values?
| What you see | Common cause |
|---|---|
| Zero or missing | Transfer still in progress, account closed, file didn't load |
| Much lower than last quarter | Large withdrawal, partial transfer out, missing holding |
| Much higher than last quarter | Large deposit, duplicate holding, a transfer counted twice |
| A holding with no price | Late or missing pricing for that security |
The pre-billing check
- Compare every account's value with last quarter's.
- Flag zeros, missing values and changes above a set threshold, for example 20 percent.
- Explain each flag: transfer, deposit, withdrawal, closure, pricing, file problem.
- Hold any bill you can't explain yet, and bill the rest.
- Record each flag, the explanation, and when any held bill went out.
A worked example
Take the run above at a hypothetical two-person RIA. Of the three zeros, two are accounts mid-transfer from another firm, and one closed in the quarter; all three are handled under the agreement's proration and termination terms. The doubled value turns out to be a holding counted twice in the import file, so that bill is held until the custodian's file is corrected. Everything else bills on time, and each explanation is noted with the run.
What are the common gaps?
- Billing on whatever value is in the file.
- No comparison with last quarter.
- Estimating a value with no written method.
- Held bills forgotten until the next quarter.
When is this overkill?
If values match the custodian's statements and nothing moved, the comparison takes minutes. It's the quarters with transfers and big deposits where it matters.
How Advorra fits
Advorra brings in your custodian's account files, shows accounts that aren't yet assigned to a client, and runs quarterly billing in arrears with exclusions, keeping every run on a billing blotter. So odd values and the decisions about them sit with the billing record. See the product page, or read about reconciling custodian data and the Q4 billing run checklist.
One thing to do this week: set the threshold above which a quarter-on-quarter change gets a second look before billing.
An operations checklist, not legal or compliance advice. Your agreements and written billing method decide how values are determined.
Questions advisors ask
Should we skip billing an account with a missing value?
Usually you hold that account's bill until the value is confirmed, and bill everything else on time. Record the hold and its reason.
What are the most common causes?
Transfers in progress, accounts opened or closed in the quarter, late pricing on a holding, and import files that didn't load completely.
Can we use the previous quarter's value?
Only if your agreement and written billing method say so. Otherwise, confirm the real value first.
How do we spot odd values?
Compare each account's value with last quarter's and flag big changes for a quick look before billing.
Is this compliance advice?
No. It is an operations checklist.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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