Since the introduction of Check 21,
companies have adopted remote
capture services as a way to streamline their payment flow, reduce
administrative time of preparing
deposits, and — in some cases — eliminate additional costs associated with
paper checks. Now, there is an additional way for middle-market companies to
further streamline payment flow and
reduce cost via a new online receivables
feature that combines an innovative
application of check scanning technology with advanced lockbox processing.
Smart Business spoke with Jay
Matyas, senior product manager of
PNC’s Treasury Management Division, to
learn more about this new feature for
remote deposit services.
Can you explain this new lockbox technology?
The typical remote deposit service captures check images, converts them to an
electronic file and allows companies to
deposit checks remotely, without having
to make a trip to the bank for deposits.
For lockbox clients, depositing the
check is only part of the process. The
related documentation is just as critical
in order to effectively apply those
checks against accounts receivable. The
new technology, like PNC’s Remittance
on Site (ROS), provides companies with
the ability to also capture check stubs
and full-page remittance documents as
well as envelopes.
What types of companies and organizations
benefit from a product like ROS?
Most companies that use a lockbox can
benefit. For any number of reasons, a
company may receive a portion of its
check payments outside of the normal
lockbox process. The check can show up
at its corporate headquarters or at a field location. In many cases, someone at the
company packages and reships these
items to the lockbox site for processing.
ROS gives clients the ability to capture
and submit images of the checks and the
documents they receive, eliminating the
need to mail anything to the lockbox.
How does it work?
It’s a fairly simple process. You need a
software program from your financial
services provider, a PC with an Internet
connection and a flat-bed scanner. A
company scans every document in the
envelope of the incoming payment. Once
loaded into the scanner, the captured
images can be uploaded to the electronic
lockbox program for processing. After
the deposit process has been completed,
images of the checks and documents will
be included as a part of the regular outputs, such as Web pages or transmissions.
What are the benefits that companies can
realize by using this new technology?
In today’s environment, lockbox
clients have limited options regarding the handling of payments received in-house. In many cases, they mail those
items to a lockbox using an overnight
courier service, which can be expensive
as well as time-consuming, since the
physical transfer of payments can add a
day to the collection process.
ROS speeds this process. Companies
can submit items on a same-day basis.
For payments received in-house, clients
can literally gain an additional day that
can be critical at the end of a month or
quarter.
Another benefit would be that it
enables companies to maintain a more
comprehensive image archive.
What are other considerations for companies that are considering this technology?
There are a few issues that companies
should consider. First, one of the most
critical concerns is related to image
quality, so a good document scanner is
necessary. Also, companies should
ensure that they have secure controls in
place to either safeguard or destroy original checks once they are deposited
electronically. We recommend that a
company determine the retention time
frame based on its recordkeeping needs
and other considerations. And finally,
when destroying the checks, it is recommended that they be shredded.
This was prepared for general information
purposes only and is not intended as specific advice or recommendations. Any reliance
upon this information is solely and exclusively at your own risk.
JAY MATYAS is senior product manager for PNC’s Treasury
Management Division. Reach him at [email protected].