00:05escrow audits they're not exactly anyone's favorite part of the job but they're unavoidable
00:11and for title agencies that aren't prepared an audit notice can trigger a scramble that's
00:17entirely preventable here are some practical steps you can take to stay prepared year-round
00:25when an auditor arrives they're going to ask for documentation
00:29typically the last two to three months of monthly reconciliation reports that means having
00:35specific records ready to go here's what they want to see bank statements for the reconciliation
00:41period reconciliation summary and trial balance statement proofing register bank adjustments and
00:49book balance and any outstanding receipts and disbursements report beyond the paperwork auditors
00:56are looking for red flags that signal process gaps or breakdowns things like negative file balances
01:04aged or unresolved deposits in transit stale payoff or tax checks outstanding wires or unidentified
01:14ledger balances at the center of all of this is the three-way reconciliation a three-way reconciliation
01:24confirms that three key figures are in alignment the bank balance the book balance and the escrow trial
01:32ledger balance alta best practices required every month and underwriters use it as their primary measure of escrow
01:40account accuracy when these three things align it confirms that what's in your bank account matches what's in your
01:47system right down to the individual file level the catch reconciliation is cumulative fall behind one or two months
01:56and you're compounding inaccuracies get an audit notice in that window and now you're doing catch-up work against a
02:03tight
02:03deadline here are two best practice controls to remember the reconciler should not have check signing authority and
02:10management must review and approve monthly reports
02:18some agencies take it a step further with daily reconciliation matching transactions to escrow books
02:24every day so discrepancies stay small and manageable here are a few daily habits that reduce audit risk
02:31match incoming and outgoing transactions daily clear routine items promptly review exception reports for irregularities
02:40finally monitor for stale or aging items monthly the focus shifts to clean up resolving unidentified or
02:49negative balances reviewing aged deposits and wires and confirming all disbursements have cleared when
02:57these habits are consistent your audit ready every day not just when the notice arrives but when an audit notice
03:05does land a structured checklist is important it should look something like this read the audit letter
03:12immediately and clarify expectations early loop in any third party reconcilers right away gather
03:20reconciliation reports for the prior three months resolve aged items and unidentified balances document how
03:29discrepancies were researched and remove former employees from all bank signatory lists
03:36one more thing auditors are people a cooperative responsive approach makes everything go smoother
03:47for most agencies the challenge isn't knowing what to do it's finding time to do it alongside daily operations
03:56reconciliation doesn't directly drive revenue so it can slip that's where soft pro comes in
04:02soft pro delivers accurate timely monthly three-way reconciliations optional daily reconciliation support clear
04:10exception identification and complete reporting and a dedicated reconciler assigned to your accounts
04:17whether you reconcile in-house or use a partner keeping your trust accounts in sync means you can face any
04:23audit with confidence
04:25changes
04:25you
04:26you
04:26you
04:27You
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