Real Estate Lending Firm Slashes Monthly Close Time by 50%

Jenni Moseley, Alliance Marketing Manager

August 9, 2022

Toorak Capital Partners is a correspondent lending platform that funds loans for residential and mixed-use properties across the US and UK. Headquartered in New Jersey, the 100-person team acquires loans from private lenders nationwide and manages them using its expertise in capital markets, securitization and more.

In its six-year history, Toorak has acquired over $8.5 billion in loans and grown its balance sheet to over $3 billion in active loans. Toorak-funded projects have provided housing units in renovated and/or stabilized properties to nearly 40,000 families to date – an average of approximately 1,000 families per month last year.
 

Bringing Fund Accounting In-House

Toorak initially managed its finances in-house while outsourcing accounting to a fund administrator. As the team added loans and built up its borrowing base, its transaction volume increased substantially. Toorak needed to disaggregate data in its ledger, showing details at the loan level. That requirement challenged Toorak’s existing infrastructure and added time to the month-end close.

“It wasn't uncommon for the close process to stretch out well over a month,” said Corporate Controller Bill Coffey. “This would stretch into the following month, and we were constantly playing catchup.”

The company was also using the same fields in its accounting system for different types of information on its vendor bills, creating confusion, delays and errors. For example, if the team had an invoice for a specific loan, it had to put either the invoice number or the loan number in the “invoice number” field; it couldn’t add or customize additional fields.

“Fixing the problem in our previous system would have required an absurd investment of both time and money,” said Coffey.
 

The Best Path Forward

In early 2020, Toorak decided to bring some of its accounting back in-house and hired Coffey as its first controller. The company evaluated enterprise resource planning (ERP) systems, and NetSuite OneWorld(opens in new tab) won out for a few reasons: Notably, the global nature of the solution managed Toorak’s intercompany journal entries in multiple currencies, and automated currency conversions and intercompany eliminations.

“These were all huge pain points with our prior solution,” said Coffey. “Our impression from the NetSuite demo and our own research was that NetSuite had a bit of an edge over other available ERP solutions in this area.”

After choosing NetSuite, Coffey worked with NetSuite implementation partner MorganFranklin. The partner “was an excellent and trusted adviser that made sure the implementation was progressing and that I was delivering back to Toorak everything that was promised,” he said.

For example, Toorak wanted to capture lending-related financial transactions at the individual loan level within the general ledger. Coffey worked with MorganFranklin to architect a solution in NetSuite that tags relevant financial transactions to individual loan numbers. This allows Toorak to reconcile the general ledger’s loan accounting records faster and more effectively with third-party data. From a reporting perspective, Toorak can now report and analyze earnings and profitability by loan type, geography and other loan-related attributes.  

“That was a major part of the value proposition with NetSuite and something that wasn't part of the value proposition with other available solutions,” said Coffey.
 

The Suite Life

Live on NetSuite for about a year, Toorak now uses all of the ERP’s native financial management(opens in new tab) functionalities, as well as its functionalities for fixed assets management(opens in new tab), banking and journal entries/journal entry approvals. It also takes advantage of NetSuite's direct integration with Bill.com(opens in new tab) for enhanced AP and AR automation.

Toorak has automated even more processes by working with MorganFranklin to create additional customizations, like a custom script to close amortization schedules. It uses NetSuite’s Custom GL Lines Plug-In(opens in new tab) to automatically create custom GL impact lines on transactions to reclass vendor bill payments, bypassing the need to manually reclassify journal entries. Finally, a custom PDF template automatically adds remittance detail based on subsidiary.
 

A 50% Faster Month-End Close and More to Come

With NetSuite, Toorak spends less time manually recording journal entries, reconciling records and developing monthly and annual reports. The company now completes its year-end audit in three months instead of four, and month-end close is 50% faster on average. Easy information-sharing has improved overall collaboration between team members and departments. Management gets more insight into the performance of individual loan products and can hone its strategies accordingly.

Looking ahead, Coffey wants to further customize Toorak’s reporting to support even more complex decision-making. He’d like to customize reports that offer even more insight into overall financial performance and return on equity from a loan product standpoint.

Meanwhile, the team has launched Toorak Connect, a platform that makes it easier for its local partners to buy and sell loans online and offers more transparency throughout the process. Coffey likened that product’s efficiency to NetSuite’s, calling the ERP system “an equally transformative solution to manage Toorak’s increasingly complex finances” as the business continues to expand.

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.