Lori N. McCausland
Where in the world are the loan files?
Remember when “file stacking” was actually a Thing?
Or did I just date myself?
In case that was (ahem) before your time – it used to be that there was a specific order in which a given loan’s physical files were stacked. That way, it was easy to find what you were looking for, and easy to see if something was missing.
Fast forward to our digital era, and … okay, where did that loan document end up?
Time for a process!
As we’ve noted before (see this article on the “Components of a great procedure”), having processes and procedures is a Good Thing. It makes life easier all around when everyone knows how a particular series of steps is supposed to go – in this case, how to manage and maintain the electronic filing system for your loan files.
Here are our recommended steps for creating your Electronic Loan File Stacking system – ELFS!
1. Get your team’s input.
You may already have an outline in mind – and that’s fine, of course. But if you get input from your team, you’ll accomplish two things.
First, you’ll get their buy-in to actually implementing the system, since they helped define it. And second, you’ll be talking to the people who actually use the loan files, day in and day out, and they’ll have insights you don’t have.
2. Start with the end in mind.
While we hope the end is with a paid as agreed, paid in full loan, consider using the liquidation file order as your starting point.
3. Define a universal “file tree.”
Sticky notes on a white board work well here, because you can move things around as you start seeing what makes the most sense.
4. Define your naming conventions.
Every document should be named the same as every other document of the same type, with, of course, an identifier of the Borrower.
And as mentioned above, the best naming suggestions come from the people who handle these documents the most.
One more thing to consider. SBA also has file naming conventions that should be adhered to.
Need help with them? Give us a call and we’ll send you our list of naming convention samples.
5. Determine how to track who updated each file.
You may already have a document list, a separate entity from the other SBA-required and internal documents. If not, it’s a good idea to create one, both to make sure you’ve got all the pieces you need, and to use as a log to track who’s updated each document, and when, for each Borrower.
Just make sure your process includes updating that list whenever you create or update a document!
6. Templates! templates! templates!
Create templates for the file tree so all anyone needs to do is copy-and-paste.
The file tree templates should include any and all document templates as well, including the document list defined in the last step.
7. And speaking of process – make sure you have one.
Your processes and procedures should include step-by-step guidance on how to create the file tree and maintain the documents within it.
Without a process – as you know! – people will make up their own ways of doing things and will spend time reinventing the wheel. And you may end up with a bicycle wheel where you actually needed a tractor tire.
8. What about correspondence?
Email correspondence may be coming to you in various formats, depending on what email service you use. And then, of course, there are those old outdated things: pieces of paper.
Your department may require maintaining hardcopy correspondence sent to you in physical file folders, but if you can scan them in and keep them as PDF files, then they can be added to the appropriate place in your file tree.
Emails can typically be saved as text (.txt) files, or can be printed off to PDF, if you have a PDF generator available (and if your office uses Microsoft, you almost certainly have the Microsoft PDF printer).
However you choose to save correspondence, make sure it’s part of your process to do so. It’s very easy, in the flurry of day-to-day activity, to forget to save off an email.
And make sure it’s saved in the correct place in the file tree, with the correct naming convention. For emails, we recommend including the date (YYYY-MM-DD format) as the first part of the file name in order to automatically sort them in chronological order.
9. You did all this … and a file “stack” still went awry.
It will almost certainly happen, especially when your team is first getting used to the new process.
To recover, we suggest creating a new file stack from the template, and then carefully moving each document over into the correct location in the new stack, one by one.
Time consuming, perhaps, but in the long run it will save time when you need to find the right document in a hurry!
It’s always fun to imagine having a host of quick, smart, and invisible helpers at your beck and call. Which is why we were so amused to note that the acronym for Electronic Loan File Stacking is ELFS.
In all seriousness, though, having a system for managing your electronic loan files will save you time and angst when you need to pull up a specific Borrower’s documentation quickly.
And that’s exactly what you’ll get when you have ELFS.
Want some help with this? We manage multiple clients’ files, and we’ve mastered the art and science of electronic file stacking. We’d be glad to talk with you about how to set this up for your SBA loan files. Contact us today to set up a call!