Loan files pose a unique challenge in the world of records management. For most types of loans, one or more paper documents must be retained as part of a loan file. Collectively, these documents can be thought of as the physical loans inventory. Over the life of the loan, multiple “touches” of these documents are required for onboarding, retrieval, interfiling and ultimately offloading.
In our tours of loan vaults, we have observed many examples of poor processes that hamper loan operations, including excessive manual handling of files and inefficient storage and retrieval practices. Together, these issues lengthen the time it takes to process loan files and severely limit the capacity of the vault. Fewer loans processed equals lower profitability. In addition to that, the error-prone manual processes create significant compliance risks.
In a two-part blog post, we outline seven proven best practices that will help you avoid these issues and maximize the productivity of your loan vault.
Seven High-Performance Practices for Physical Loan Inventory Management
1. Loan inventory tracking systems
This is the software platform on which you build fast, accurate loan management processes. With an inventory tracking system, every loan in the vault is captured and tracked in a central database. To help automate the tracking process, the tracking system should be connected directly to your loan origination software.
Why do it?
- The tracking software increases the speed of several processes: loan verification, loan certification, file retrieval, loan pooling, and moving to offsite storage.
- It increases the accuracy of your inventory count. You will know exactly what you have on hand, how complete it is, where it is, who has it now and who had it previously.
2. Efficient file folders
The recommended format for loan operations is manila, legal-size folder with a side-tab to accommodate the label.
Why do it?
- The side-tab label is easy to read, increasing the speed of file retrieval.
- The side-tab label eliminates the need for empty space above the folder, helping you fit more loan files on your storage shelves.
3. Color-coded folder labels
Labels are color-coded based on characteristics of the loan and provide time-saving visual cues for staff.
Why do it?
- The visual cues allow workers to more quickly identify and retrieve files from the vault.
- Color-coding also greatly increases filing accuracy, ensuring that loans are returned to the correct location.
In next week’s post, we continue our list of best practices, exploring file folders and shelving choices.