5 Advantages to using Loan Servicing Software
At a time when most businesses have automated alternatives to assist the daily and tedious tasks of many departments, loan servicing or management has its own set of options. Loan management is a high-precision job whether granting loans is your core business or not.
Too often, we see inefficient and manual management, especially for companies whose loans are not its core activity – for example, for ancillary financing or inter-company loans – but also, surprisingly, for professional consumer and business loan companies. Loan automation software has a positive impact on many aspects of the business and it helps overcome the manual processes that are prone to human error.
Speed and efficiency on all levels, loan management software optimizes profitability but also saves time and money. In addition, it is a well-placed investment to improve the working conditions of your team and the overall performance of the business.
1 – Reduce calculation errors
The first unquestioned benefit of automation is the significant reduction in computational errors. Errors that can be costly for the business are impeccably managed by the software. As qualified as your team may be, human error can occur in way too many variables. Fortunately, the word “error” is not part of the automation vocabulary. A good loan management system maximizes automation and tools in order to reduce the risk of such errors.
2 – Reduce risk and bad debts
Not being able to collect money that is due is a concern for many companies: a reality that many departments experiment at their own expense. Loan servicing software is there to help you to clearly identify critical situations in order to be able to react quickly before delinquent accounts reach a point of no return or payments become impossible to collect. Saving you time and money, such software allows you to regulate your cash flow and avoid unfortunate losses. Not only does this keep your cash flow positive, it also reduces your annual financial costs.
A single platform allows you to track where your money is, set payment schedules, prevent payment delays by emailing or texting alerts to borrowers, and ensures the application of automatic fees on late or missed payments. Fees charged to the borrower become an incentive to pay on time.
3 – Save your team time
It goes without saying that the automation of some manual tasks: posting unpaid, partial or late payments, tracking and production of notices to customers in default, charging of fees, recalculation of payment schedules that have been modified… to name just a few, will save valuable time for your team who will no longer have to perform all these processes manually. As a support tool, loan management software simplifies many aspects of day-to-day work allowing your team to focus their efforts and energy on what’s really important and finally be able to just about eliminate lower-value, time-consuming tasks.
A person using loan management automation tools will be able to process ten, a hundred, even a thousand times the number of files compared to one using a classic manual process. When data quantity is significant and sensitive, the introduction of automation makes it possible to establish an essential organizational process in the treasury or accounting department. Speed and flexibility are a given, but quality loan servicing software mostly helps manage one’s time, data and accuracy of results.
4 – Reduce time required to create accounting and other essential reports
Monitoring loans and ensuring their collection is only one aspect of management work. Creating and generating the accounting reports and often invoices and statements for borrowers and investors is another critical aspect. Quality loan management software will ensure the accuracy of the data and make it easy to extract the right information in real-time and when required for any reporting period.
You will be given the choice between different types of reports that you can customize with additional data. Many loan management solutions offer the option to choose from hundreds of fields. Obviously, the primary goal being to simplify processes, these reports can be exported in several formats to accommodate the most popular accounting systems such as Sage or Quickbooks, but also open formats like Excel, text or CSV.
Several management software packages allow the generation of more advanced statistical reports based on socio-economic factors. For example, we could determine the average amount of loans granted by region, by industry, city and gender of the borrower. The same applies to the interest (income) which can be sorted by various criteria. It is even possible to go so far as to determine which group of individuals are better payers!
5 – Optimize revenue
A sinequanone consequence flows logically from all the previous advantages. When it’s possible to accurately track outstanding loans, identify risks, and quickly manage unusual situations, all the while allowing your team to work more efficiently, revenue naturally increases.
Revenue increases because you are able to receive payments faster thanks to the monitoring offered by the management software. Simplify your follow-ups and collect your payments with, well… almost complete peace of mind!
Furthermore, quality loan management software gives you a clearer view of your short, medium and long-term revenue projections. The system allows you to predict your cash flow and devise the strategies and actions to implement at the right time to optimize your income.
If you are interested in acquiring one of these programs, Margill offers you a 30-day free trial. Go directly to: Margill Loan Manager free trial download page or contact us at 001-450-621-8283.