He (She) Who Hesitates . . .

**Please check our most recent blog post regarding the latest changes to the FASB deadlines.**

There’s a lot of truth in clichés, and this old proverb comes to mind again in thinking about how to approach preparations for CECL. A few years off might seem like a long time, but FASB has set that time frame because Board members understand it will take banks that long to gather and analyze the data they need and decide on a CECL-compliant model.

For many bankers the first step is to add the tools required to manage the substantial amounts of data needed to project future losses – internal and external data, economic as well as loan data. That means implementing a system like the Loan Loss Analyzer, which (pardon me for being boldly commercial) is the best system for many reasons, including that it is configured to accommodate your particular loan portfolio and credit management processes, and can be housed either internally on the bank’s servers, keeping all that data inside your firewall or securely on external servers.

Because your system is built around your data and processes, it takes time to implement. So if “CECL Job No. 1” is gathering data, then right along side is implementing a system that will enable you to use that data.

With so many banks making the move from Excel to a software solution, the laws of supply and demand will soon be coming into play. We encourage you to act now, to decide on a system and begin the process of implementation. Remember that anyone “who hesitates” just might wind up “lost.”

Use our CECL Transition Calculator to develop a timeline for your bank or credit union to move from estimating the ALLL using the incurred loss model to CECL. Created with leading accounting firms and our expertise, the seven questions are steps to consider in making a smooth transition to CECL.