Family office accounting is the accounting and operations software of a family office, the private firm that manages the money of one rich family. It works as the family office's ERP (enterprise resource planning) system, the software that keeps a company's books and runs its daily work.
A rich family's wealth is not held in one account. It is spread across many companies, trusts and people. Each one needs its own books and its own tax return. A family office may run accounts for twenty or more of them.
Take, for example, a family office in Mumbai that manages ₹2,000 crore for one family. In one week, it receives dividends from listed shares and rent from two buildings. A private equity fund sends a capital call, a request for money that the family had promised to invest. The office pays a grandson's college fees abroad and a staff salary. Every one of these is recorded in the books of the right company, trust or person.
The software keeps a separate ledger, the record of money in and out, for each one. It also combines them into one report for the whole family. It receives the current value of each investment from wealth aggregation software. It receives capital calls and fund statements from each fund's fund administration system, often through an investor portal.
Each month, the office checks that its books match the bank statements and the brokers' statements. This is called reconciliation. At the end of the year, the software produces the figures for each tax return.
How is it different from wealth aggregation? Wealth aggregation shows what the family owns and what it is worth. Family office accounting records every payment and keeps the official books. Some family offices also invest on their own, much like a hedge fund; they still need these books.