5 Critical Things Family Offices Need to Know about Bill Pay and Accounting

Anneke Stender, Executive Vice President of Plumb and the Founder of the Family Office Accounting and Bill Pay Division of Plumb, discusses bill pay and bookkeeping solutions for family offices.

An overview of Anneke’s background and Plumb Bill Pay

Plumb was founded in 1996 as an outsourced accounting firm for small to medium-sized businesses.

As we developed close and trusted relationships with these privately held businesses, we realized how unorganized some of the business owners were in keeping track of their personal finances. Due to our expertise in accounting and financial reporting, we recognized that we could serve the owners and their families as their outsourced accounting department.

Our family accounting and bill pay services were developed by accounting professionals who have a deep understanding of the unique needs of high-net-worth individuals and family offices. The idea is that we serve as an extension to our client’s family office teams, providing accurate data to all of their advisors so they can make better tax, estate and financial planning decisions.

“By providing high-touch accounting services and technology solutions through our Plumb BillPay app, we act as financial stewards for our Family Office clients in their day to day financial lives. We make sure that their bills are paid on time and their accounting practices are in order, so that our clients can devote more energy to enjoying life and have peace of mind.” – Anneke Stender

1. What are the different ways in which families and family offices pay their bills & handle their finances?

There are three different ways that bills are currently processed within families and family offices:

  1. Dedicated staff such as personal assistants, CFO/Controller or an in house bookkeeper.
  2. CPA firm provides bill pay services in conjunction with their existing accounting services department.
  3. Third-party bill pay provider that specializes in bill pay services, cash management, as well as reporting for families and family offices. These firms typically work in conjunction with the various family office advisors such as their financial planners, CPAs and estate planning attorneys to provide reliable and accurate reporting.

2. What are the 3 advantages to outsourcing Family Office Bill Pay?

It boils down to three advantages to outsourcing the bill pay function within a family office setting:

  1. Families can take advantage of the segregation of duties, including the checks and balances around their bill pay function. What we see here is that most families have one dedicated person handling all steps in the bill pay process. The biggest pain-point third party providers solve here is to alleviate the lack of checks and balances in this process by having a second or even third set of eyes review the transaction before it is released.
  2. Ooutsourced service firms take advantage of the latest technology in their space which helps to automate the process. Frequently, this leads to increased efficiencies and transparencies in the bill pay and approval process for families. For Plumb, this includes a proprietary bill pay technology solution that we have developed in house. Our bill pay workflow process software is an efficient, secure and easy way for our clients to get the right approvals prior to issuing a check or electronic transfer without having to comb through various email communication.
  3. Service firms like Plumb take a white glove or high-touch service approach when working with high-net-worth families and their family offices. This leads to quick turnaround times and the ability to handle last-minute requests, like urgent wires or ACH transfer which can be a big stress relief for families and their advisors. We call this service stance stewardship.

Ultimately, what third-party service providers do for bill pay is to optimize control over the process, bring more scalability, redundancy, precision, and expert oversight into the bill pay and financial organization of families and family offices. As a result this really creates more financial clarity and peace of mind for their clients.

3. What are best practices to optimize Bill Pay for policies, controls and security?

  • The confirmation of wire instructions: Confirm instructions verbally and record these verbal confirmations. If wire instructions have changed, we verbally confirm revised instructions.
  • Centralization of bills: We set up a post office box and a dedicated email address for each client for all incoming invoices which streamlines communication and minimizes loss of bills.
  • A billing tracker is then created to schedule out payments. The billing tracker allows us to proactively reach out if no invoice is received.
  • Segregation of duties: An effective workflow for bill pay should look like this:
    1. Individual receives and enters the vendor invoices.
    2. Second individual will review the transactions to ensure the appropriate
    approvals have been completed.
    3. Third individual will have the authority to sign off on the transaction.
  • Workflow approval application software: Applications provide you with the ability to set approval limits by vendor, dollar amount or entity, as well as integrate with the underlying accounting system to avoid double data entry.

4. How is Plumb Bill Pay integrated with capital calls?

Capital calls and alternatives are an administrative burden for most of our clients.

The Plumb team takes care of the following financial administration tasks:

  1. When a new investment is made, the bill pay system can book the overall commitment, and schedule capital calls.
  2. Team monitors and tracks the remaining commitment.
  3. Verbal confirmation of wire instructions.
  4. Categorization and reconciliation of capital calls and distributions.
  5. Monthly report to the family and its advisors to better manage any upcoming cash and tax planning needs.
  6. Collecting all of the year end K1 statements for the CPA to incorporate with their tax compliance work.

5. How does Plumb Bill Pay allow families to have more clarity over their wealth?

Financial clarity is achieved through integration with existing advisors. Integration with other service providers happens on the reporting side. We link into the various banking and investment portals to obtain the data and categorize them in the underlying accounting system.

Our recommendation around reporting is that:

  • Monthly cashflows should be provided to the family, as well as the financial advisors so they can appropriately plan for future cash reserve needs.
  • Quarterly consolidated financial report is generated which contains a balance sheet, profit and loss, as well as entity financials. The goal here is to provide accurate and reliable data so that other service providers around the family can be more effective from a financial, tax and estate planning perspective. This allows our clients a much clearer and more accurate financial picture.

“Again, the most important take away here is that high net worth families and family offices are looking for ways to simplify their bill pay and bookkeeping needs and doing this in a secure and transparent fashion. They are looking for experts that specialize in their respective area and work well with their existing family advisors. The integration with a third party service provider that is fully integrated with a family office group and their financial advisors can really streamline this process.” – Anneke Stender

Interested in learning more about our services? Contact Anneke today:

Family Office Services: It’s more than Bill Pay

This is an interview brought to you by Acclaim Magazine and Editor, Tom Burroughes for Family Wealth Report. 

Cutting the Bill Payment Burden Adds Big Value For Clients

An interview with Anneke Stender, EVP of Plumb Bill Pay and Robert Scherer, President of Plumb Bill Pay.

What do you think is the main reason you have received this award-winning stage?

Plumb Bill Pay has been laser-focused to deliver an accounting service that has been either overlooked or underserved in the private client community. By offering a stand-alone outsourced bill pay solution to family offices, wealth managers and the high-net-worth, we have capitalized on a gap in the marketplace.

The interest in our “Property & Household” service offering has grown significantly in the past 18 months as the trend of outsourcing continues to rise. As a result, Plumb Bill Pay has onboarded an average of three new clients every month, adding 12 new employees to the team and expanding into three office locations across the country.

“We believe that our firm has achieved this award-winning stage based on the combination of providing high-touch customer service that is built on a technology platform with bank-level security while operating with proven accounting systems and procedures,” said Robert Scherer, President of Plumb Bill Pay.

The financial teams who engage Plumb Bill Pay as their back-office to process and pay client bills gain a competitive edge with a wide range of benefits.  Our service improves their business processes, which frees up time for their team to focus on investment strategies and higher-level accounting functions. It enhances their service offering by having a trusted resource for their clients who are overwhelmed with the amount of bills to pay and expenses to track. With our established security protocols and checks and balances, the burdens of compliance, risk and cybersecurity that come with processing payments and potential fraud are diminished when outsourced to Plumb Bill Pay.

What sort of challenges did you have to take on?

Working as a vendor for some of the world’s largest financial institutions, the security of our platform and internal controls to protect confidential information was built on unique and stringent specifications. We believe it is imperative for clients and their financial managers or designees to be able to maintain access to the bill pay workflow, but without compromising security.

We took on the challenge to build a customized cloud network that is backed on a singular data center. It is certified and compliant for bank standards with two-factor authentication and VPN connection. We also setup procedures and role-based workflows for approval limits and constantly monitor accounts for suspicious activity.

What can you tell us about how your colleagues contributed to this success?

As our firm experience’s rapid growth, we shifted the structure of our bill pay teams for optimal customer service. Every bill pay client is supported by at least 3 accounting experts, ranging from a dedicated manager, to associates, an account supervisor and signors. This allows for the appropriate checks and balances, while also giving the client and their personal financial team access to Plumb when they need them.

Since we work with successful and fast-paced entrepreneurs and affluent families, they have a lot of moving parts to their financial structure. Our personal bill pay teams understand the unique needs of the high-net-worth and provide the white glove customer service they require and deserve. Clients gain financial peace of mind knowing their household expenses are being handled, while also having clear insights into their finances with cash flow reports and tracking.

How have you dealt with the changes taking place in the North American wealth management market and in what way did your award reflect that?

Many of the wealth managers and financial advisors who refer to our personal bill pay services are looking for a reliable resource to handle their client’s complex bill pay service needs. It’s a competitive marketplace in the North American wealth management market in order to attract and retain high-net-worth clients. By offering a solution that reduces the overwhelm of managing multiple bills and chasing due dates, wealth managers can turn to Plumb for support. We work alongside them and customize our accounting services, reporting and security measures depending on their current operations.

From whom do you take inspiration, either in terms of people or other organizations, inside or outside the North American wealth sector?

“Our inspiration to deliver a superior bill pay service comes from our experience with working with some of the country’s largest investment firms and family offices,” said Anneke Stender, Executive Vice President of Plumb Bill Pay. “We admire their far-reaching approach and ability to provide such massive resources and options for their clients.”

What sets you apart from your peers this year?

For over 20 years, Plumb has been providing back-office accounting and financial reporting to businesses and high-net-worth families.  It is this depth of knowledge and our corporate finance approach to handling bill pay and multi-entity bookkeeping for the private client community that stands out above the rest.

We understand the business-sized challenges of high-net-worth clients who have a complex financial life. The families we work with have an average of 100 – 200 bills to pay each month, plus 3-4 entities to track. By producing cash flow reports with an up-to-date general ledger system, clients and their advisors have clear insights into their wealth to make decisions based on their financial goals.

What will you do to keep the standard of an award-winner and push ahead in the future?

Prior to winning this award we started the development of our Bill Pay App. It is now complete, and we have begun staged roll outs. This workflow application will be used as a tool to automate the bill pay process and enhance the client experience. By applying this forward-thinking technology, it will give us another tool to push ahead in the future.

Contact Plumb for a demo of our Bill Pay app.

What do you hope will be the main consequence of achieving this accolade?

This award brings us incredible exposure to a community that may not be familiar with our outsourced solution for bill pay.  Our current clients, some of whom are the wealthiest people in the country, love Plumb Bill Pay. It is their confidence in our service that drives us forward.

We hope it will bring attention to a service that can help financial management teams spend less time handling administrative bill pay functions and more time working alongside their clients to help strengthen financial futures.

How will you use the award to raise your profile in the industry among clients?

As a first-time nominee, we have been following the FamilyWealth Report Awards and their community of contributors for years. It is an honor to be recognized and we will continue to publicize our award online and within our marketing collateral.

For a list of all the award winners and their interviews, view the Acclaim Magazine.

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