5 Advantages of Early Audits for Mortgage Brokers: Submitting Financial Statements to NMLS

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Introduction: 

As the deadline for submitting audited financial statements to the Nationwide Multistate Licensing System (NMLS) approaches on March 31st (https://mortgage.nationwidelicensingsystem.org/slr/common/fs/sitepages/default.aspx) mortgage brokers face a pivotal choice: when to conduct their audits. By starting the audit process early—specifically testing financial statements as of September 30—brokers can reap significant benefits. This proactive approach not only ensures compliance with NMLS requirements but also positions brokers for greater success throughout the year.  While it sucks to have an audit :), the sooner you start, the less painful the audit would become. Below are the 5 advantages for starting your audit journey early: 
 
1. Obtain Accurate Insights Early
 
Conducting a financial statement audit early allows mortgage brokers to gain invaluable insights into their financial health sooner. By testing their financials as of September 30, brokers can address any discrepancies or weaknesses before the year-end rush. This foresight enables them to make informed financial decisions and implement necessary changes to bolster their operations.
 
2. Reduce Stress During Tax Season
 
The period leading up to the March 31 submission can be hectic, especially for mortgage brokers balancing audits alongside tax filings. By initiating audits at the close of the third quarter, brokers can mitigate last-minute pressures and ensure that they aren’t scrambling when deadlines loom. An organized approach to brokers’ audits can lead to a smoother tax season, allowing more time to focus on client needs and business strategies.
 
3. Streamlined NMLS Compliance
 
The NMLS requires audited financial statements as part of its compliance process. Starting the audit early helps brokers align their financial practices with regulatory expectations, reducing the risk of non-compliance. With more time to address any audit findings or deficiencies, brokers can confidently submit their financial statements, avoiding potential penalties or delays.
 
4. Improved Financial Strategy and Planning
 
Early audits create opportunities for strategic planning. With an understanding of their financial position in advance, mortgage brokers can make timely decisions about growth initiatives, budgeting, and resource allocation. This proactive financial management can lead to improved profitability and sustainable growth throughout the year.
 
5. Building Stronger Relationships with Auditors
 
Starting the audit process earlier allows brokers to establish a stronger rapport with their auditors. This collaborative relationship can encourage auditors to provide valuable feedback and insights tailored to the brokers’ specific practices. An open line of communication can not only simplify the audit process but also enhance the overall quality of the audit report.
 
Conclusion: 
 

In conclusion, mortgage brokers should seriously consider the advantages of initiating their audits as of September 30. This early approach ensures compliance with NMLS requirements, alleviates stress, and enhances financial strategies. By prioritizing timely audits, brokers can position themselves for a successful year—ready to face challenges and leverage opportunities in the evolving mortgage landscape. If you’re interested in getting your financial statements audited, please contact us. 

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