♬It’s the Most Wonderful Time of the Year!♬
Holidays are right around the corner, and that means…the New Year brings…tax season. For Investor Relations (IR) professionals, this means the dreaded K-1s need to be prepped and disseminated to their partners. Time to batten down the hatches.
So, lock down a week between January and March, get everyone in the office, and let the manual, tedious preparation commence. Followed by the “envelope” stuffing party to send out those K-1 distributions.
But, it doesn’t end there. Who gets which? Who gets multiple? Who’s receiving on the behalf of another?! For IR professionals, the crippling fear sets in, and they’re doing mental gymnastics in a process that hasn’t changed for decades. Even worse, one mistake can derail the process, creating a series of do-overs.
Even if you have an accounting firm or a fund admin do the work, the IR team will just receive a continuous scrolling PDF of K1s that will be sent out. So, then a document splitter must be used to pair the correct codes in order to have K1s that can be sent to each partner. Ugh, who’s actually even keeping track of this?
There’s a better way.
What if K1s could be prepared in a way that:
- Removes human error from the process, eliminating that nagging question “Is the right K1 being mailed out?”
- Provides a secure Investor Portal (for both Institutional LPs and High Net-worth Individuals, alike) that is compliant with regulatory standards your LPs expect from top-tier Fund Managers.
Ultimately, investment professionals want to be able to:
- SIMPLIFY K-1 upload and delivery process
- SECURELY deliver financial statements and capital accounts to investors
- AUTOMATE year-end reporting and audit work papers
- ADHERE to ILPA standards
Start Planning NOW for a Better K-1 Tax Form Prep Season
Dynamo for Automated Preparation & Secure Access to K-1s
Now is the time to think about how to streamline your firm’s process of disseminating K-1s. Dynamo’s Investor Relations platform is purpose-built with that requirement in mind. In addition to addressing security concerns, the value in automating investor notices, reports, and K-1s (during tax season) is a burdensome process addressed by Dynamo.
Dynamo’s infrastructure makes a significant difference for IR processes— but especially concerning tax season, IR correspondence, and investor enablement. Here’s a sample from a case study of one of Dynamo’s clients:
“With 250 investors invested in 40 different partnerships, this required aggregating, organizing, and quality-assuring thousands of checks and partnership reports. It took about a week for three people from the office to put it all together.
It was quite an operation. It required a lot of paper.” – CFO Marty Willet of Basin Street Properties
“Now that we’re up and running on Dynamo, the whole distribution process goes faster and smoother than it ever did before, and we’re not ruining a forest of trees every time we send one out,” Willet said. “We still have a few investor groups who like to receive the paper packet, but we’re down to half a day putting that together.”
Basin Street Properties also benefited from customizing K1s, reports, and distributions, so all the information the investors need was securely uploaded to the Investor Portal.
“We can get them information on a timely basis without having to send it out via snail mail, and investors can review it whenever they want,” Willet said. “As we continue to add more partnerships and grow, we have more bandwidth with our existing staff versus having to add more headcount.”
The team is also much more proactive because, through Dynamo’s secure hosting capabilities, they’re able to get their clients the answers to their questions before they even need to ask them. Read the full Basin Street Case study.
Dynamo for Investor Relations
Dynamo’s investor relations software is the key for investment professionals to navigate their web of Limited Partners (LPs) and their commitments, questions, and performance data. Our cloud-based alternative investments platform includes intuitive mass mailing, relational tagging, Microsoft Outlook integration, and an integrated Investor Portal.
During the upcoming tax season, focus on building efficiencies and maximizing team resources – which ultimately help fuel the relationship with LPs and business partners. Simply put, manual preparation of K-1s does not fit into this utopia.
Here’s to a Happier K-1 Tax Form Season
It can take some time to get a new process in place, so contact Dynamo today and learn how we can help your team adopt a streamlined and automated K-1 tax form process.
Learn more about Dynamo’s Investor Relations software and watch our short video below.