Lock Box Reconciliation for a Financial Institution-CDFI
In this case study we will outline a lock box reconciliation for a Community Development Financial Institution (CDFI) and how the automated reconciliation process featured in Odyssey delivers many benefits.
INDUSTRY: FINANCIAL INSTITUTION
INDUSTRY APPROPRIATE: ANY INDUSTRY WITH LOCK BOX USAGE
DEPARTMENT: OPERATIONS & FINANCE
Challenge:
Customer is in the Community Reinvestment Loan Industry. Customer has to reconcile the lockbox transaction to the loan system. At the time of discovery, the customer was using Excel to manually reconcile the transaction activity. In addition to reconciling the loans, they also had to assign to the correct investor. At the time of initiation, there were numerous unreconciled items.
Solution:
Pantheon created an automated reconciliation process with Odyssey, separating the various payment types (directed ACH, client-initiated ACH, wires and checks), assigning to the proper borrower and investor and initiating the ACH transfer from the lockbox to the proper subaccount. In addition, two levels of reconciliation were created: daily and historical. The Reconciliation team is now performing exception reconciliation processing versus reviewing every transaction.
Benefits:
- Time savings for the reconciliation team, as they are now doing exception processing, while Odyssey is auto-reconciling the majority of the transactions.
- The underlying causes of the historical unreconciled items are now more obvious and can be addressed programmatically.
- Reduced risk to the client as fewer transaction are classified as unreconciled.
- Quicker movement of funds to the investor due to the auto-reconcilement more concentrated focus on exception processing.
- All activities are automatically logged using a built-in log file which improves governance and compliance.
- Dashboard created that shows all transactions at a high level and the activity can be drilled down on with a click of a mouse to see details.
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