The billing process includes all customer billing activities performed by a bank. For customers who have an individually managed portfolio (e.g. for institutional investors), billing comprises the fees for all the banking services that were used. The customer portfolio may contain securities (funds and equities), currency balances or structured products and more.
Typical types of fee in billing:
Flat fee that covers all costs of the portfolio and includes both taxable and tax-exempt components.
Fee discount that is granted on, for example, portfolios of the bank’s own funds.
Percentage fee on the portfolio›s overall portfolio volume or partial volumes for portfolio management.
Performance-based fee for the bank. These may also include a credit in the case of negative performance.
Minimum/ Maximum fees
Minimum or maximum fee that will be charged in a defined period.
Charges or fees that are not billed through an automated fee.
The types of fee are applied individually or in combination. The billing process covers all the steps of the maintenance of the contractual conditions until the periodic accrual calculation or billing.
Functions at a glance
- Fee calculation as a percentage fee on the portfolio volume (AuM Fee) or as a fixed amount per period (flat payment).
- Performance-based fee (performance fee) that is calculated based on a participation rate in the performance achieved. The performance may be applied straightforwardly or in comparison to a benchmark. Usual parameters include caps, floors, high water marks and loss carryforwards.
- Determination of fee rates as fixed rate or graduated rate. With graduated rates, a distinction can be made between sliding and threshold graduations.
- Definition of fee rates in percent or basis points.
- Volume pooling for rate determination at different levels (e.g. portfolio, part-volumes, pooled volumes).
- All major calculation methods available (e.g. month-end holdings, daily holdings, holdings at period end, average holdings, etc.).
- All common usages preconfigured in the system (30/360, actual/actual, actual/360, actual/365, business day/business day) including taking multiple bank holiday calendars into account.
- Flexible billing periods (monthly, quarterly, half yearly, annually). Deviations from calendar periods configurable.
- Freely definable contract periods per mandate and fee type.
- Multi-currency capability universally available.
- Calculation of minimum or maximum amounts across some or all portfolio fees. The minimum or maximum amount may be applied pro rata or annually.
- One-off payments, integrated into the periodic billing or individually with free input of client texts.
- Audit-proof, configurable approval process using the principle of two sets of eyes.
- Reproducibility of all historical invoices of a contractual partner at a detailed level at any time.
»The combination of configurable standard functions and customer specific adjustments allows the entire billing process to be mapped in a unique and efficient way.«
Bank Vontobel: Billing
Vontobel calculates complex fees using automation for over 100 institutional investors with calculo. VAT payers Shares are calculated individually. In addition to master data and transaction data, transactions, exchange rates, fees and accounting documents were integrated flexibly and audit-proof, transparent client reporting established.
Credit Suisse AG: Mandate Billing
The bank was on request offering customers different flexible fee models for the discretionary mandates it looked after. Management, minimum/maximum and performance fees were charged in various currencies and different asset classes. The bank charged volume, product and minimum/maximum fees for a high number of incoming advisory mandates. For our client we implemented a highly-automated solution in order to manage and bill mandates more efficiently.