Net capital computations for all broker dealers
If you are a broker dealer trying to obtain accounting compliance status then net capital computations are a fact of life for you. Accounting compliance starts with accurate and timely net capital computations which are to be reported at the end of each fiscal quarter by the individual broker dealer. If you are a New York Stock Exchange broker dealer then accounting compliance also requires that you report any net losses greater than twenty percent mid-quarter, in order to satisfy the growing demands of FINRA. Regular net capital computations will let the broker dealer know his net capital at any given time which is important for several reasons.
The first reason is that by calculating net capital computations you are satisfying FINRA requirements and avoiding hefty fines and penalties. FINRA last year alone doled out nearly $113 million dollars in fines for non-compliance issues and inaccurate net capital computations. The second reason to conduct these computations on a regular basis is that it gives your broker dealer firm a better understanding of its bottom line, and therefore more control over its financial future. This leads to the final reason for broker dealers to calculate net capital computations on a regular basis. By conducting habitual net capital computations the broker dealer will also quickly become aware of any discrepancies in financial statements and will be able to catch any fraud or theft that is being conducted in his office. This could save your broker dealer firm millions of dollars before it is too late.
But calculating net capital computations on a regular basis is no easy task and requires a great deal of time, energy and resources from each broker dealer in order to fulfill accounting compliance guidelines.
So what is the best solution for broker dealers who want to conduct regular net capital computations and continue to fulfill their accounting compliance status?
The best solution is to hire an outside accounting and compliance firm to handle all net capital computations. By hiring an outside accounting and compliance firm all of the pressure is off of the broker dealer which allows him to go back to dealing with what is really important; making money for his clients. An outside accounting and compliance firm will conduct regular net capital computations and be able to report total net capital to the broker dealer at a moment's notice. This allows the broker dealer to reap all the benefits of knowing his net capital without having to deal with the stress and anxiety of calculating it.
But always remember to use a reputable and established accounting and compliance firm for all of your net capital computations. An established firm will always be able to back up their work, and guarantee all figures during a FINRA examination. An established accounting and compliance firm will also have a long list of high profile securities clients, who they have served for many years regarding accounting compliance issues. And finally a reputable accounting and compliance firm will always put the needs of their client first, working to help each broker dealer continue his accounting compliance status with FINRA. If you would like any further information about net capital computations fill out the form to the right of the page and a professional net capital computations expert will contact you for your free consultation.
