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Charge Off

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Summary

Charge Off is an unfortunate inevitability of lending. Our current process is dependent on manual file maintenance and reporting, and consumes an inordinate amount of our Repayment Manager’s time on a monthly basis. Excluding the analysis of accounts for charge off, the tasks associated with the current charge off process are clerical in nature and exhibit poor allocation of the Repayment Manager’s expertise.

As an organization we hold operational efficiency in the highest regard, and the charge off process is an excellent candidate for an efficiency overhaul via automation.

Rationale

The Repayment Manager spends approximately 10 minutes per account performing the file maintenance required for charge off. We currently average 50 accounts that are charged off per month. This equates to approximately 8 hours per month exclusively spent on file maintenance. This does not include 3 additional hours spent manually preparing the charge off report submitted to the Board of Directors.

By applying an automation solution to the charge off process, the manual file maintenance and reporting can be substantially streamlined. In this way the Repayment Manager’s time and expertise are refocused on the analysis of accounts and other more appropriate tasks. Automating this process will also significantly reduce the risk of file maintenance errors.

Proposed Solutions

Symitar offers an automation solution: The Charge Off System. The Charge Off System automates all aspects of the process. It includes the preparation of the report submitted to the board of directors for accounts recommended for charge off. The Charge Off System is driven by a HTML-based user interface for the selection of accounts recommended for charge...

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...on and move the Charge Off System live. According to Symitar the entire implementation timeline on this product including programming could take upwards of 45 days to complete. This includes time for design, development, programming and testing.

Financials

This expense was not included in the 2010 budget. The cost included for customization below is based on 20 hours of Symitar programming at $200 per hour.

Recommendation

Our recommendation would be to purchase the Symitar Charge Off System at a total cost of $7620.00. Expensed over five years this equates to a net monthly expense of $127.00. This solution provides a user-friendly and fully automated approach to the Charge Off process as a whole. It not only eliminates the time consuming manual file maintenance involved in the current process, but also prepares the charge off report.
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