Case Study: Building and Managing Scalable Accounting Infrastructure at Octane Lending

Background & Problem

As Octane Lending scaled, its operating model became increasingly complex:

• The company originated thousands of loans monthly through dealers nationwide.

• Loans were assigned to various SPVs, each tied to specific warehouse facilities or securitizations.

• Executives and institutional investors demanded monthly reporting by SPV and consolidated financial performance.

• The company was required to deliver annual audited financials, SPV-specific financials, and meet financial covenants tied to its debt agreements.

Despite having a growing finance team, Octane’s existing accounting system was not designed to handle multi-entity, high-volume lending activity, making it difficult to maintain clean, real-time financial data.

Solution: Building an Enterprise-Ready Accounting Infrastructure

To meet growing demands, Octane Lending embarked on a project to completely overhaul its accounting operations.

1. System Architecture

• Implemented NetSuite ERP with multi-entity structure to support:

• Parent company (OpCo)

• Each SPV as a separate legal and reporting entity

• Integrated loan servicing platforms via custom APIs to automatically post:

• Principal and interest payments

• Charge-offs and recoveries

• Deferred revenue and origination fees

2. Chart of Accounts and Entity Controls

• Created a standardized chart of accounts across all SPVs, with dimensions for:

• Loan type

• Risk tier

• Facility ID

• Set up intercompany rules for tracking transfers between parent and SPVs

• Designed a consolidation layer in NetSuite to roll up financials for reporting

3. CECL Compliance and Loan Loss Reserves

• Partnered with a third-party data science team to implement a Current Expected Credit Loss (CECL) model

• Developed a process to:

• Pull historical loss data from servicing systems

• Apply probability of default (PD) and loss given default (LGD)

• Book monthly journal entries for loan loss reserves at the SPV level

Ongoing Monthly Operations

1. Month-End Close Process (15-Day Cycle)

• Days 1–5: Data sync from servicing platforms and automated entry generation

• Days 6–10: Accruals, intercompany eliminations, deferred revenue adjustments

• Days 11–15: Review, reconciliations, and financial package preparation

2. Internal Accounting Department Roles

• Controller: Oversees consolidation, reporting, and technical accounting

• Revenue Accountant: Focuses on loan fees, interest income, and recognition timing

• SPV Accountant(s): Assigned to specific SPVs; manage debt service and covenant tracking

• Staff Accountant: Handles AP, payroll, and general ledger support

• FP&A Manager (finance side): Bridges between accounting and executive reporting

Reporting & Compliance

1. Executive and Investor Reporting

• Created a monthly reporting package including:

• Consolidated income statement and balance sheet

• SPV-level P&Ls and performance metrics

• Loan performance KPIs: charge-offs, prepayment speed, delinquency rates

• Waterfall reports for warehouse lenders

• Automated dashboards (via Looker or Power BI) for real-time visibility

2. Financial Covenant Reporting

• Built automated tests for:

• Debt service coverage ratios (DSCR)

• Asset coverage ratios (ACR)

• Portfolio delinquency thresholds

• Submitted monthly compliance certificates to warehouse and ABS investors

Annual Audit Process

Octane Lending undergoes an annual GAAP audit by a top-10 national CPA firm.

Audit Preparation:

• Created a PBC (Prepared By Client) checklist based on auditor needs

• Maintained detailed support for:

• Revenue recognition (interest, fees, servicing income)

• Loan reserve methodology (CECL documentation)

• Debt agreements and amortization schedules

• SPV cash flow waterfalls and investor reporting

• Ensured segregation of duties and internal controls were documented and tested

Result:

• Clean audit opinion issued with no material weaknesses

• Financials delivered to board and investors within 60 days of year-end

Results & Benefits

• Reduced month-end close from 30+ days to 15 days

• Improved accuracy and timeliness of investor reporting

• Scaled from 2 SPVs to 8 without needing to double the accounting team

• Strengthened trust with institutional lenders through clean financial data

• Positioned Octane Lending to complete its first ABS securitization

Key Takeaways

• Fintechs using SPVs must invest early in multi-entity accounting infrastructure to scale successfully

• Automation and integration between servicing systems and GL are critical to handle volume

• Executive and investor reporting should be automated and standardized

• A strong accounting team with specialized roles ensures both operational and strategic success

• Audit readiness is not just about compliance—it builds credibility and unlocks capital

About Octane

Octane Lending is a fast-growing fintech specializing in recreational vehicle loans, operating through a complex structure of multiple special purpose vehicles (SPVs) for financing. By late 2024, Octane had launched over a dozen securitization SPVs to fund its loans, issuing more than $4 billion in asset-backed securities since 2019 . This structure meant Octane’s finance team had to manage accounting across a parent company and many subsidiaries, each with separate loan portfolios, bank accounts, and reporting obligations. The existing processes struggled to keep up with this complexity. Accounts payable (AP) was largely manual – invoices were processed separately for each entity, with paper checks and email approvals causing delays and a lack of centralized oversight. Month-end close was protracted and spreadsheet-driven, taking over a week to consolidate results from all SPVs and the corporate entity. Critical reports like the cash flow statement were prepared by hand in Excel, increasing the risk of errors and inconsistencies. These challenges made it difficult to provide timely, accurate financial information to executives, investors, and auditors. The company recognized that to support its rapid growth and satisfy stakeholders (including regulators, investors, and lenders), it needed to deliver consolidated financial statements (income statement, balance sheet and cash flow) for the entire business . In response, Octane’s Controller (the user) spearheaded an initiative to modernize the accounting tech stack, aiming to automate AP, streamline the multi-entity close, and produce a true, automated cash flow statement within NetSuite.