You SHOULD, but do you know just how important your balance sheet is to your business?
Let’s talk about who REALLY cares if the financial statements you provide are accurate. For starters, as a “financial partner” in your business, your warehouse banks and investors REALLY care. They need accurate data to assess the risks in doing business with your company. The more confidence they have in your P&L statements, the more confidence they have in you as a business owner. Think about that for a minute. When you are assessing credit risks on your borrowers, don’t you want to know if there are any missing details that could come back and bite you in the—well, you get the picture.
Accounting isn’t all black and white, but you cannot afford to throw some numbers into a random chart of accounts thinking “close enough.” You do realize it is “garbage in, garbage out,” right? Understanding the nuances of accounting for mortgage banking is very important to your success. When you don’t understand the gray areas of accounting, you better lean on an expert who can keep you on track and out of trouble with an audit. And, there will come the day when you do have an audit!
Do you understand what it means to produce “GAAP Compliant Financials?” To begin with, “GAAP” stands for Generally Accepted Accounting Principles … commonly followed accounting rules and standards for financial reporting. In mortgage banking, there are accounting rules specific to the industry. Like “Loans Held for Sale”–has your banker mentioned that term?
Smaller mortgage companies may not have experience with GAAP financials. Just because a company hires an “accountant” or “CFO” doesn’t mean those accounting “experts” understand accounting for the mortgage industry any better than you. It is best to partner with a true mortgage accounting expert—someone who has been in the trenches of the mortgage industry. If you are going to outsource your accounting, you need to work with an accounting service that truly understands how to partner with your business and not be an anonymous provider. Your financials are the backbone of your business–if you don’t know where you really stand financially, how can you expect to stay in business and grow?
Let me give you the top five reasons to work with a qualified outsource accounting service:
1. Mortgage accounting isn’t easy … you agree?
2. You save money … no salary, corner office, expense account and benefits packages
3. You get accurate and timely financial reporting–every day
4. You have more time to do what you love–are you smiling yet?
5. You have access to mortgage banking experience as a partner with your
Carolyn Fairris Thomas is director of sales for Alpine Pacific Advisors. Carolyn spent 30-plus years in the traditional mortgage banking industry, starting as a loan processor and spending the final years in warehouse lending. She may be reached by e-mail at [email protected] or call (469) 733-8383.
