Advantage Systems’ Joe Ludlow: Breaking Down the Complexity of Vendor Management Across the Branch Network

Joe Ludlow

Joe Ludlow is Vice President for Irvine, Calif.-based Advantage Systems, a provider of accounting and financial management tools for the mortgage industry. More information on the company can be found at   

In this time of low volumes and tight margins, many lenders are scrutinizing expenses more closely and seeking innovative ways to enhance efficiencies and gain greater control over their operations. One area that is ripe for improvement is vendor management – particularly within a mortgage lender’s branch network.

For lenders, effective communication with their branch managers is key. Successful vendor and expense management creates proper detail and documentation that flows through to the branch manager’s online portal, creating self-service research capabilities and instilling confidence in branch managers. The trick is to do it with a better, more comprehensive accounting workflow, while the best of these systems incorporate easy-to-use portals for internal manager expense approval.

Traditionally, accounting managers have tracked accounts payable within their accounting software, but with the requirement that each payable receives approval from management. As an accountant with Baton Rouge, La.-based GMFS Mortgage, Alli Yeargin has witnessed the benefits and savings that come with adopting a new tech stack using an internal online approval system to drive operational efficiency. Yeargin’s firsthand experience details how lenders can wrangle managers to cooperate successfully.

Prior to a technology overhaul, Yeargin recalled that “a lot of our approvals came from emails or hand-written signatures on an invoice. Recording the invoice, requesting the approval, recording the approval, or sometimes having to reach out to request approval again is a tedious process for AP and too easy to miss something. Managers don’t like their inboxes crowded and oftentimes have demanding issues that take priority over sending an approval email.”

In the absence of effective technology, the sheer volume of vendor relationships and invoices becomes an overwhelming challenge for accounting staff. Manual processes become impractical, and the potential benefits to the lender remain unrealized. As loan volumes decline, the ability to reassess expenses and vendor relationships becomes even more critical.

In a time where every minute matters, a process that streamlines invoice approval and expense management, for example, deploying a rules-based engine, has become a necessary capability. “Managers appreciate the once-weekly email that is sent to remind them to review open invoices through the online portal. This is a practice that we started a few months into my taking this position, and it made a huge difference,” says Yeargin.

Yeargin continues, “Rather than having to regularly check in, managers are sent one email, reminding them to review their open invoices. When there are questions or concerns, they usually respond to that email, and we are able to get them addressed right away. Invoice reference numbers help us be more specific in our communication. Some managers use the comment section of the payable, but I mainly use that to keep notes about why an invoice hasn’t been approved. If multiple managers are needed for approval, I can see who has approved and who hasn’t so I can reach out to them.”

The accounting department has also benefited from this approach. “Our system allows us to easily refer to old invoices and how they were posted, pull reports to analyze data and view which invoices have not been approved because they still needed to be reviewed,” states Yeargin. “When audit time comes around, all of our notes regarding an invoice are attached to the invoice, itself, which makes it a lot easier to provide the proper documentation for the selections that are made.”

Rules-driven accounts payable workflows empower lenders to gain control over the approval process. This control is paramount in swiftly identifying changes in vendor fees, contractual terms, service level agreements and billing frequencies. The power of these incremental improvements can be profound for lenders as it is not just about a single change, but rather the collective impact across thousands of unique invoices and transactions.

The Evolution of Vendor Management Within a Branch Network
The complexities of vendor management are further heightened within a branch network environment, particularly as lenders continue to reduce headcounts. According to Yeargin, “Utilizing an online portal for manager expense approvals allows me to sort my invoices based on branch and send a consolidated list to each manager, if needed. Timestamps of when invoices were posted and interacted with are useful in seeing when invoices are usually received, how long they have been waiting for approval, and, of course, keeping record of their approval. It also helps me out, as the person responsible for making payments, to provide evidence that I posted the invoice timely.”

If multiple managers are needed for approval, including large dollar amount invoices, Yeargin can see who has and who has not responded, clearly identifying where follow-up is required. With a system that offers an accounts payable aging report, for example, Yeargin can easily pull the list of active vendors and accounts to identify open payables and how these need to be paid. Reporting includes the general ledger description, assisting accounting staff in the review of invoices and ensuring each one is posted correctly.

Immediate Impact on Bottom Lines
Technology, when harnessed effectively, accounts for only about 5% of a lender’s cost to originate a loan. Yet, its impact on operational savings is significant in influencing the remaining 95%. In an environment where lenders and vendors alike face challenges, the ability to adapt and leverage technology can be the defining factor in successfully navigating market changes.

Breaking down the complexity of vendor management within a branch network requires a more holistic approach by lenders. By combining the benefits of automation and a centralized system, lenders like GMFS Mortgage are successfully streamlining processes while positively impacting their bottom lines.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)