Accounting Process Control Framework for Financial Instruments
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Solution Overview
Problem
Current accounting processes for financial instruments face challenges in meeting increasing regulatory demands and shorter reporting cycles while maintaining low operational costs, requiring a cost-effective and efficient method for universal adaptation across various financial standards.
Innovation Solution
A framework for controlling the accounting process that includes receiving information about financial instruments, creating corresponding entries, deriving relevant accounting steps based on registered information, and executing these steps according to determined dates, managed by a central process controller to ensure uniform control mechanisms and traceability, thereby eliminating redundant steps and improving comprehensibility and stability.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional accounting processes are used to meet increasing regulatory requirements and shorter reporting cycles, then compliance and reporting accuracy are improved, but operational costs and processing time increase
Solution Approach 1:
The system enables self-service accounting processes where the accounting engine automatically executes accounting steps based on registered information and derived work packages. The process controller autonomously manages the accounting workflow, eliminating the need for manual intervention in routine accounting tasks while ensuring compliance with regulatory requirements through systematic execution of accounting steps.
Solution Approach 2:
The system changes the state of accounting information from unprocessed to registered, and from registered to executed, through systematic parameter transitions. The process controller manages status changes of accounting steps and work packages, transforming raw financial instrument information into processed accounting data through defined state transitions that ensure compliance and accuracy.
2Reliability
If comprehensive accounting steps are executed to meet regulatory demands, then accounting accuracy and compliance are improved, but total cost of ownership increases
Solution Approach 1:
The accounting process is segmented into distinct accounting steps, each with specific functions and status states. The system divides the comprehensive accounting process into manageable work packages that can be executed independently and tracked separately. This segmentation allows the system to execute only the necessary accounting steps for each financial instrument, reducing redundant processing and lowering total cost of ownership while maintaining accounting accuracy.
Solution Approach 2:
The process controller serves multiple functions: it receives information, creates worklist entries, registers information, derives work packages, determines execution dates, and executes accounting steps. This universal controller handles diverse accounting scenarios across different financial instruments and regulatory requirements through a single integrated system, reducing the need for multiple specialized systems and lowering overall ownership costs.
3Adaptability or versatility
If manual accounting processes are used, then flexibility in handling various financial standards is improved, but process complexity and time consumption increase
Solution Approach 1:
The system dynamically adapts to different financial standards and accounting requirements through configurable accounting steps and work package derivations. The process controller can adjust the execution of accounting steps based on the specific financial instrument and applicable regulatory requirements, providing flexibility without manual intervention. The system's dynamic nature allows it to handle various financial standards while maintaining a consistent underlying process framework.
Data Source
AI summary
Described herein is a framework for controlling an accounting process for financial instruments. In accordance with one aspect of the framework, information associated with a financial instrument is received. Receiving the information includes creating a corresponding entry in a worklist. The received information is registered. A work package of relevant accounting steps is derived based on the registered information. A plurality of dates having an open status is determined. The dates indicate when the relevant accounting steps are to be executed. The relevant accounting steps are executed according to the determined dates.