What’s a continuing net settlement?

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Continuous net settlement (CNS) is an automated accounting feature that centralizes settlement processes, tracks cash movement, manages accounting and generates reports. It can manage any type of cash flows or assets, and funds are readily available faster than other processes.

Also known as CNS, a continuous net settlement is an accounting feature that allows for the automated entry of various types of items into the accounting records. The idea behind this type of automated process is to quickly and easily settle the compared transactions while providing up-to-date information on current currency balances that are tracked in the system. Along with tracking cash movement, a continuous net settlement system will also manage the accounting and integration of activity across various types of securities.

Centralizing the settlement process is one of the main benefits of a continuous net settlement strategy. The information is continually updated as it is received, allowing you to immediately determine the current status of different investments and monetary balances in various accounts. In contrast, other processes would rely on publishing the data in different sections of the accounting record books, in order to maintain an appropriate balance in the general records. Depending on the complexity and the number of accounts that need to be traced, this can be a somewhat cumbersome process.

Reporting through a continuous net settlement system is another benefit that users often find useful. Systems of this type can be programmed to generate reports automatically at specific times of the day or allow the generation of a report when certain transactions are recorded. As with the other automated features of CNS, this structured generation of informative data in the form of a report can save a great deal of time and effort.

Almost any type of cash flows or assets can be managed using a continuous net settlement entry system. Financial instruments such as municipal bonds, as well as corporate bonds, can be easily liquidated. The same is true for assets like Unit Investment Trusts or various types of stocks. Since the delivery of these types of line items is managed by the system itself, the chance of making a delivery error is minimized, a factor that can make the process of auditing records much easier.

In practical terms, the feature of a continuous net settlement recording process means that funds are readily available much faster than with other processes. This is due to the fast removal process inherent in the system. Businesses will find this approach extremely useful, as assets can often be published one day and ready to use the next morning. Investors also find this type of accounting strategy useful, as funds generated from various activities can be drawn upon sooner rather than later, which can be important if the investor wants to use the proceeds of existing investments to finance the purchase of a new investment.

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