Business Insights

Ask an Expert: What to Know Before You Outsource Your CFO

Here’s a fairly common scenario in mortgage back offices these days: Your loan origination system contains three fields, maybe more, that have somehow managed to go undefined. It’s okay. You’re short-staffed. Everyone’s stretched. You figure you’ll figure it out down the line.

But pretty soon you have a systemic problem. Since it’s unclear what fees go in what fields, your loan officers enter them wherever they think they go, and it’s never consistent. One loan officer might think the first field is for appraisal fees while another thinks it’s for credit report fees.

Garbage in, garbage out.

What you end up with, of course, is a jumbled mess, and an LOS that’s useless when it’s time to pull reports.

Could a fractional CFO or controller get you out of this mess? Yes – if they have mortgage banking expertise. Find one who does, and you’ve found the skills and experience to take both an up-close examination of your LOS and a long view of your business through an accounting and reporting lens. Just ask Richey May’s CPA/CAAS Director and Practice Leader Kimberly Dittmer.

“They’ll not only get in there and work with your team,” she says. “They’ll look across your business through that same lens to make sure you’re doing everything possible to maximize your reporting capabilities.”

Industry-specific software expertise. Maximizing your reporting capabilities is a big deal, but it’s only, well, a fraction of the value a fractional CFO and our CAAS team can provide.

Consider this: Mortgage companies use a variety of accounting software programs. Outsourcing with Richey May gives you access to a team well versed in all of them, from QuickBooks at the base level to a more sophisticated mortgage accounting software like AMB (Accounting for Mortgage Bankers) or Loan Vision.

“Those two systems were really built specifically to handle mortgage loan accounting,” says Dittmer. “So that’s what we would typically refer most customers to once they get past 80 loans a month, sometimes even less than that. It just really makes it much easier to record and reconcile everything.”

Dittmer says we’ve also started to see clients moving to NetSuite, one of the most popular mid-market ERP systems.

“Many of our tech savvy clients are looking to NetSuite because it’s fully cloud-based and has API connectivity to an ever-increasing inventory of add on modules,” she says. “It gives you some really good capabilities, and you can configure it to handle your loan-level activity.”

On the LOS end, we work with Encompass, which Loan Vision interfaces with directly, as well as Lending Pad, Meridian Link aka Lending QB, and many others including proprietary systems. Thanks to our mortgage accounting expertise and experience working with all of these systems, our team can jump right in and help to refine loan-level accounting processes.

What not to ask a fractional CFO to do.

It may be tempting to use your fractional CFO or Controller for operational needs, especially if you’re extremely short-staffed. But first consider how a fractional CFO can benefit the accounting side so someone else can take care of operational issues.

Under normal circumstances, CFOs don’t take on the operational tasks involved in, say, coordinating facility closures. Or anything else beyond the scope of standard accounting and finance operations. Of course, for most IMBs nothing about the current market is “normal.” Which is why it’s the perfect conditions for outsourcing high-salaried positions like your CFO or controller.

To learn more about our outsourced accounting and staff augmentation, consulting and accounting system implementation services, contact Kim Dittmer at kdittmer@richeymay.com.