By Gareth Hewitt, Co-founder and CEO, LemonEdge.
Private equity firms and fund administrators face heavier workloads and closer scrutiny than ever before, yet many back offices still run on systems built for a past era, when there was less expectation that services needed to be delivered quite as regularly.
Teams recognise that sticking with these tools is slowing them down, yet the thought of change is often misguidedly perceived as risky in this sector. That conservatism keeps firms wedded to workarounds that absorb huge volumes of time and limit their ability to adopt new technologies and capabilities. Against this backdrop, it becomes clearer why legacy systems create persistent friction.
Why older systems keep slowing progress
Older fund accounting platforms were built for simpler times. These systems often separate processes into offline spreadsheets as they cannot handle the complexity and volume of funds today. Staff are often reduced to extracting data from the system and reconciling it offline which is cumbersome, error-prone and typically results in extended reconciliation cycles which take key staff away from higher-value work.
Once calculations are scattered across multiple locations, audit trails become more complex. Auditors struggle to trace who did what and when. Risk teams request extra evidence, and leadership ends up comparing versions of the truth rather than reviewing performance.
What a modern platform changes
Given the challenges facing legacy environments today, how can firms move forward effectively? The answer lies in modern fund accounting technology, which is built for this increasing complexity, that unifies core processes within a single, secure platform and automates the complex, manual tasks that traditional systems have long struggled to manage.
These next-generation platforms, for example, enable capital calls and distributions to run seamlessly end-to-end, capturing each step for audit, no matter the level of complexity. Rule engines apply fee and carry logic consistently across structures and vintages, eliminating the need for offline models. With the heavy lifting handled by the platform, reviewers can focus on exceptions – and closing cycles become faster and more efficient.
The latest systems use spreadsheet-style grids which let users see how figures are produced, follow numbers back to source and lock approved results. These systems also record activity automatically, so teams retain transparency without building parallel files. Anything that happens in the system, from user activity to formulae changes and more, is logged into the audit history safely and securely, enabling users to review changes quickly and, if necessary, unpick something that is causing an issue.
This transparency becomes even more valuable once the wider ecosystem is connected.
An open, well-documented API enables authorised systems to read and write against a single source of truth, which reduces double entry and improves timeliness across upstream and downstream processes. Where APIs expose granular objects and event notifications, integrations with client facing portals, treasury and data warehouses can run closer to real time, lowering operational latency and manual touchpoints. The result is a platform that fits into existing enterprise data flows without multiplying side files or bespoke bridges.
This capability drives up engagement and adoption. When people can see where a number came from and how it was approved, they trust the system and retire the side files that once felt essential. Key person risk falls at the same time because process knowledge sits inside the platform rather than with a small group.
The power of people also matters. Adoption levels often track the experience of those leading the change, with cross-functional practitioners who understand both fund accounting and modern engineering practices accelerating time to steady state. Pairing subject-matter experts with platform specialists during design and early live cycles tends to raise data quality and reduce rework. This blend of skills links platform capability to day-to-day success.
How close collaboration through the implementation process is key in driving adoption
The success of any implementation of modern fund accounting software is dependent on all parties involved working together in a true collaboration to make it live and then to drive up adoption levels.
A discovery phase that documents the current process helps expose the shadow spreadsheets and manual steps that keep things running. A clear project team and project plan on both sides keep decisions moving. Sandbox environments let users rehearse key tasks with real data, so the first live cycle feels familiar rather than experimental.
To embed usage thoroughly, training should mirror daily work. Short, role-based runbooks that explain how to complete recurring tasks build confidence faster than long manuals.
Phasing that lowers risk and builds confidence
Firms need not migrate every fund at once. A phased onboarding model, beginning with a representative cohort, allows for the validation of data structures, controls, and workflows. Allocations and investor reporting should be integrated as part of the initial stages, ensuring that these critical functions are aligned and tested early on. Once the first tranche operates reliably, additional funds can be onboarded in subsequent waves, with continued refinement as needed.
In a carefully planned phased implementation of this kind, each step replaces a cluster of workarounds with an owned process that has clear controls and measurable outcomes. This allows firms to extract value early, which keeps stakeholders engaged and makes the next stage easier to push through.
Configuration helps here also. A flexible platform can reflect the nuances of different funds without long custom builds that are costly to maintain. This balance of standardised workflow and tailored rules allows firms to scale without returning to one-off models and manual fixes.
What leadership can expect to see
Modernising the back office is not only about enhanced efficiency. On one level, modernisation improves control and clarity, which shows up in the metrics leaders care about. Quarter-end also becomes more efficient because calculations use consistent logic and approvals sit inside the workflow.
At the same time, LPs will receive faster answers with supporting detail that is easy to trace, while audit cycles shorten because evidence is available on demand rather than being spread across multiple emails and spreadsheets. Internally also, the day-to-day rhythm changes as teams spend less time reconciling and more time analysing results and planning next steps. This shift typically lowers time pressure and stress, with fewer out-of-hours interventions because exceptions are surfaced early, playbooks are consistent, and support requests are traceable.
A practical route to resilience
Most modern fund accounting implementations have the same end goal in mind: a new way of working that keeps important activity inside the system, making it easy for users to operate and establishing a clean data foundation that supports reporting and assurance. When firms take this path, the back office can effectively be transformed from the hard-working engine of the firm to a value differentiator. Stakeholders know where information lives and how it flows, routine work runs reliably, and exceptions are visible earlier to reduce increased time pressure. With core processes consolidated and audit trails intact, attention naturally turns to portability and choice.
Concerns about vendor lock-in are common and reasonable, of course but they can be addressed by agreeing clear data export rights at the outset, aligning on standard data models and validating them during testing. Open APIs and documented mappings reduce the chance of future dependency and make it easier to integrate with other systems such as investor portals or data warehouses. When ownership of data and process logic is clear, firms can keep their options open without slowing the overall programme.
Stepping back, change in private equity operations needs to be orderly and transparent, with outcomes that matter to clients and regulators. For organisations that have lived with workarounds for too long, moving to a single, automated platform is a practical step that improves accuracy, reduces operational risk and gives precious time back to teams to focus on driving value for the core business.
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