Glossary Terms
Compass - The Only Sales Glossary You Need
Shadow accounting refers to a parallel or supplementary accounting system maintained by investment managers or financial institutions to track and monitor the performance and transactions of certain investment portfolios or funds. This additional accounting system runs alongside the primary accounting system and is often used for specific purposes such as compliance, risk management, or performance evaluation.
Shadow accounting is a term commonly used in the investment management industry. It refers to the practice of maintaining a parallel or supplementary accounting system alongside the primary accounting system. The purpose of shadow accounting is to provide an independent verification and validation of the primary accounting records, transactions, and calculations.
While shadow accounting itself does not directly impact sales teams, there could be indirect effects depending on how it's implemented within an organization. For example:
The history of shadow accounting and sales commission is intertwined with the evolution of business practices, particularly in industries where sales performance plays a significant role. Here's a brief overview:
Under shadow accounting, various funds and strategies can be used to achieve different objectives such as verification, risk management, and investor communication. Here are some examples:
This additional accounting system is often operated by the hedge fund's investors or a third-party service provider and serves several purposes: