Fund Accounting

Fund accounting is not
standard bookkeeping.

A fund answers to many investors at once, not one owner's P&L. Capital contributed and returned has to be tracked individually per investor, NAV has to be defensible to an independent valuer, and carried interest has to flow through a waterfall correctly. A general accountant applying standard bookkeeping to a fund gets the structure wrong before the first close.

Talk to us → Read our fund accounting guide

Capital accounts tracked per investor

Contributions, distributions, ownership percentage and unfunded commitment maintained individually, not blended into one fund-level number.

NAV computation, audit-ready

Schedules prepared to support your independent valuer's work and reconciled into the fund's books, not estimated internally.

Capital calls, distributions and waterfalls

Pro-rata calculations tied directly to capital account records — return of capital, preferred return, carried interest, and final split, in the correct order.

GAAP and IFRS fund financial statements

Fund-level financial statements prepared for your auditor, and ILPA-aligned investor reporting most sophisticated LPs now expect as standard.

The core problems

What goes wrong when a general accountant
manages fund books.

⚠️

One blended capital account instead of many

A standard chart of accounts has no natural place for tracking twenty investors' individual contributions, distributions and ownership percentages separately. Blending them into one fund-level number works until investors have different entry dates or commitment sizes — then it becomes unworkable.

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NAV treated as a year-end exercise

NAV is not a number you compute once a year. Every capital call, distribution, management fee and carried interest calculation depends on a current, defensible NAV. Treating it as an annual audit task rather than a running figure creates errors that compound with every transaction in between.

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Waterfall sequencing done wrong

Return of capital, preferred return, carried interest, final split — in that order, not any other. Getting the sequence wrong misallocates real money between investors and the manager, and it is expensive to unwind once distributions have already gone out.

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Management fees calculated on the wrong base

Fee agreements specify committed capital, invested capital, or NAV as the base — and often switch from one to another after the investment period ends. A general accountant applying one formula throughout the fund's life gets years of fee calculations wrong.

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Investor reporting that does not match the books

A capital account statement sent to an investor should tie exactly to the fund's own ledger. When investor reporting is prepared separately from the books — often in a spreadsheet nobody reconciles — the two drift apart, and an LP noticing the mismatch is a credibility problem, not just a bookkeeping one.

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Multi-currency and multi-entity structures unaccounted for

A GP entity in one jurisdiction, a fund vehicle in another, and LPs spread across several currencies is normal for a modern fund. Books built for a single-currency, single-entity business do not translate cleanly, and FX treatment gets inconsistent fast without a deliberate structure.

What we deliver

Fund-specific accounting, built around your investors.
Audit-ready and investor-ready from the start.

CAPITAL ACCOUNTS

Individual investor capital account tracking

Contributions, distributions, unfunded commitment and ownership percentage maintained separately for every investor, reconciled to the fund's ledger every period, not modelled in a disconnected spreadsheet.

NAV SUPPORT

Schedules prepared for your independent valuer

The underlying data an independent valuer needs, kept current rather than assembled under deadline pressure, with the valuer's output reconciled back into the fund's books and investor NAV statements.

CAPITAL CALLS & DISTRIBUTIONS

Pro-rata calculations tied to capital accounts

Each investor's share of a capital call or distribution calculated against their actual commitment and capital account, with the notices prepared directly from that calculation, not a separate estimate.

WATERFALL & CARRY

Management fee and carried interest calculations

Fees computed against the correct base as your agreement specifies, and carried interest calculated through the waterfall in the correct sequence — return of capital, preferred return, carry, final split.

FINANCIAL STATEMENTS

GAAP or IFRS fund financial statements

Fund-level financial statements prepared under the applicable framework and coordinated directly with your auditor ahead of the annual audit, not assembled retroactively when the auditor asks.

INVESTOR REPORTING

ILPA-aligned capital account statements

Investor-facing capital account statements and periodic reporting that ties exactly to the fund's own books, in the format sophisticated LPs increasingly expect as standard.

How the books and the fund model work together

Zoho Books handles the ledger.
The waterfall model handles the calculation. They need to agree.

Zoho Books is genuinely strong for the parts of fund accounting it is built for: multi-currency ledgers, multi-entity structures, custom fields for investor-level tracking, and clean financial statement preparation. Carried interest waterfalls and NAV computation typically live in a dedicated model, and the two need to be built to reconcile with each other, not maintained as two separate stories.

LEDGER

Multi-currency, multi-entity structure in Zoho Books

Fund and GP entities set up correctly, with custom fields and tags for investor-level tracking, and consistent FX treatment across currencies rather than an inconsistent one built ad hoc.

MODEL

Waterfall and NAV model built to reconcile with the ledger

Capital call, distribution and carried interest calculations built against your actual fund agreement terms, structured so the output ties directly back to the books rather than living as an unreconciled side calculation.

REPORTING

Investor statements generated from one reconciled source

Capital account statements and periodic investor reporting pulled from the same reconciled numbers your books and your model agree on — not assembled separately each time an investor asks.

Who this is built for

Fund managers and GPs who need
books an LP or auditor won't question.

Built from real Cayman-domiciled fund engagements — CIMA-compliant fund accounting, capital account tracking per investor, and NAV support prepared for your independent valuer.

Venture & growth funds

Capital calls, drawdowns and multi-round portfolio company tracking kept separate from fund-level operating expenses.

Cayman-domiciled structures

CIMA-aligned fund accounting for Cayman entities, with a physical presence in the jurisdiction — not a remote bookkeeper unfamiliar with the structure.

First-time and emerging managers

GAAP/IFRS fund financials and ILPA-aligned investor reporting set up correctly before the first close — not retrofitted after an LP asks a question you can't answer.

Our Cayman Islands practice →

Frequently Asked Questions

What is fund accounting and how is it different from regular bookkeeping?+

Regular bookkeeping tracks one entity's income and expenses. Fund accounting tracks capital contributed and returned across many investors at once — each with an individual capital account, ownership percentage, and share of gains, fees and carried interest — built around Net Asset Value (NAV) as the central number everything else depends on.

What is the difference between a fund accountant and a fund administrator?+

A fund administrator is typically a third-party firm providing a broad operational service including investor communications, subscription processing and compliance filings. A fund accountant focuses specifically on the books — capital accounts, NAV support, capital call and distribution calculations, and financial statement preparation. Many funds use both, with the fund accountant's output feeding the administrator's investor-facing reporting.

How are capital calls and distributions calculated?+

Capital calls draw down committed capital in tranches as the fund deploys it, calculated pro-rata to each investor's commitment. Distributions return capital and profit, typically following a waterfall — return of capital first, then a preferred return, then carried interest to the manager, then a final profit split — with each investor's share calculated individually against their capital account.

What accounting standards apply to investment funds?+

US-domiciled funds generally report under US GAAP, with ASC 946 governing investment company accounting specifically. International funds may report under IFRS instead. Investor-facing reporting for private funds commonly follows ILPA (Institutional Limited Partners Association) reporting templates, which most sophisticated LPs now expect regardless of the fund's domicile.

How does carried interest accounting work?+

Carried interest is the fund manager's share of profits above a preferred return threshold, calculated through the fund's waterfall once a distribution triggers it. Getting the sequencing right — return of capital, then preferred return, then carry, then final split — is what determines whether investors and the manager are each paid correctly. This calculation needs to tie directly back to the capital account records, not be modelled separately from them.

Related services

The full finance stack
for fund managers and GPs.

📈

Virtual CFO

Cash flow forecasting, multi-entity accounting and board-ready reporting, built from your fund's live books.

Explore → 🌐

Offshore CPA Team

A dedicated offshore accounting team for GP entities and fund vehicles spanning multiple jurisdictions.

Explore → 💵

Financial Planning & Analysis

Cash flow forecasting and budget-versus-actual tracking, built from the fund's live accounting data.

Explore →

Get in touch

Tell us your
situation.

One conversation is usually enough to understand your setup and tell you honestly what we can fix, how long it takes, and what it costs. No obligation.

Phone & WhatsApp +91 94045 42550

Email piyush@khetanca.com

💬 WhatsApp us now

Fund accounting is notstandard bookkeeping.

What goes wrong when a general accountantmanages fund books.

Fund-specific accounting, built around your investors.Audit-ready and investor-ready from the start.

Zoho Books handles the ledger.The waterfall model handles the calculation. They need to agree.

Fund managers and GPs who needbooks an LP or auditor won't question.