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Part Two: 4 Clues it’s Time to Upgrade Your Mortgage Accounting Software

Clue No. 3: You’re Using Multiple Software Applications in Your Finance Department

When a company finds it cannot do what it needs to do with the software it’s using, innovative executives will come up with a workaround. This will almost always involve the addition of a new piece of software or automation, which then must be purchased or leased, maintained, periodically upgraded and the subject of a company training program.


In a very short period of time, your departments are filled with technology, most of which was never designed to work together. We see this often in growing loan origination companies that have acquired different technologies for managing fixed assets, accounts payable, approvals, and even reporting -- all of which are separate from the general ledger. This puts enormous pressure on the IT department.


In some cases, the only seat of a given software system exists on a laptop that is assigned to a single employee. If that hardware is lost or damaged, a critical piece of business software goes with it. If the employee leaves, the company is left with a box full of data that no one may know how to open.


Any time a department has to juggle multiple systems, it opens the institution up to the risk of propagating errors and the danger of loss of data. In addition, reporting becomes a real struggle. The more you can accomplish with a single system, the more efficient the department will be both in terms of costs and employee time. Working with multiple systems is a clue that your core systems are ready for an upgrade.


Clue 4: Your Auditor is Suggesting It

We have spoken to a number of smaller but growing institutions that have intimated that their auditors, warehouse lenders and industry consultants have encouraged them to make the move away from off-the-shelf small business accounting software. These tools simply do not provide the processing and analytical power that the modern mortgage origination enterprise requires. The two biggest reason auditors are making this recommendation are (1) overall risk to the enterprise and (2) lack of sufficient control.


Small business software, and even some industry specific accounting software, allows a user to remove a transaction. Deletion of data constitutes a significant risk and these software applications do not protect the lender against it. When a transaction is deleted from QuickBooks, the software acts as though it never happened. From an auditor’s perspective, it reveals a gap. Making an error and correcting it is a common occurrence. A gap in the record means something is missing and becomes a red flag for the auditor.


Control is vitally important in the mortgage enterprise. There are many rules about what role is required to accomplish certain tasks. The same person cannot, for instance, enter a vendor into the system, submit an invoice and cut a check. QB does not forbid this. Even industry specific software that includes functionality to protect a lender from this will allow a user to turn that functionality off.


When auditors see these problems, they are likely to tell you that you have outgrown your old accounting software and need to find a new solution. When you hear this, it’s a clue that you should take seriously.


There are many other clues that the software you’re using today will not be sufficient to take your mortgage origination company into the future, but paying attention to these four clues will tell you when it’s time to begin seriously considering a technology upgrade.



About the author:


Carl Wooloff is Business Development Manager at Bestborn Business Solutions, the company behind Loan Vision, the mortgage industry’s fastest growing provider of accounting and financial management solutions. Carl can be reached at


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