Depositing checks can sometimes be a hassle — if you accept a lot of them, you’re running to the bank each day. But it can also be a hassle if you don’t accept a lot, as you may wait several days or even weeks to deposit them all at once, slowing down your cash flow.
The solution is remote deposit, which allows you to deposit checks into your bank account directly from your office.
“It has all the convenience of being able to make a deposit whenever you want, right from your desk,” says Susan A. Goins, assistant vice president, Treasury Management Officer in the Business Banking Department at Fifth Third Bank. “It also offers centralized reporting for companies with multiple locations.”
Smart Business spoke with Goins about how to set up remote deposit and how it can improve your cash flow.
How does the remote deposit service work?
Electronic Deposit Manager allows clients to enhance their receivables management process by making deposits electronically to a bank account from anywhere they do business. Clients simply connect a compact scanner to their local PC and access the remote deposit software through the Internet to scan checks.
Basic scanners are able to process roughly 50 checks per minute, while larger volume units can process up to 100 checks per minute. Once all items are scanned, the client transmits the balanced deposit files, and the check transactions are now an electronic deposit that will be sent for posting.
So instead of traveling to the banking center and waiting at the teller line, deposited checks are sent electronically as images. The original checks need to be securely stored for a short time and later properly destroyed. The check writers will see these electronically deposited items on their account statements in the same way they see all of their other cleared checks.
What are the benefits of remote deposit?
Remote deposit saves time and money by creating efficiencies and improving a company’s overall cash flow. Efficiencies are gained as remote deposit allows employees to spend more time in the office and less time traveling to the bank and standing in line to make check deposits. The scanner also creates a virtual endorsement on the back of the check, so time is saved by no longer having to stamp the back of each check with ‘For Deposit Only.’
Additionally, remote deposit helps mitigate risk and fraud by not having employees traveling with negotiable instruments and by removing paper checks from the marketplace. Remote deposit also provides better reporting for business units and the software creates check image files, thus eliminating additional photocopy efforts.
There is also a cash flow improvement benefit opportunity. As remote deposit creates check images for clearing, the exchange of checks between banks is expedited. Also, as some businesses with low volume tend to hold deposits for a week or so before they deposit items, having checks sitting in desk drawers negatively impacts their cash flow. Remote deposit simplifies the ability to get those items on deposit more quickly.
Additionally, for companies that don’t have many actual cash/currency handling requirements, remote deposit can help consolidate banking relationships as bricks-and-mortar bank facilities no longer need to be in the area of a company or subsidiary.
How has remote deposit advanced over the years?
When remote deposit systems first rolled out, they were a bit cumbersome. The product software was installed on a user’s computer, and it sometimes conflicted with accounting packages and other software programs. The original versions often required standalone PCs, and although the speed and accuracy were good, improvement was needed.
In today’s new versions, most are Internet-based, so the product and software can be accessed from multiple computers and the conflicting software issues have been eliminated. Additionally, the speed and accuracy of the scanners and software continually gets better and better.
How can a business set up remote deposit?
Through conversations and interaction with a bank’s treasury management representative, the right scanner equipment can be matched up with your business requirements. After a short implementation process on the bank side, the scanner is shipped to the client.
Upon receipt and unpacking of the scanner, along with a quick download of the drivers from the Internet, the client is ready to make electronic deposits.
Many banks will have implementation help desks or technical trainers available to provide training and assistance.
What other things do you need to be aware of when using remote deposit?
The storage and retention of the checks that have been scanned is very important, as the remote deposit user is responsible for sensitive client information in the form of the negotiable instruments.
The need exists to ensure security procedures are in place to safeguard these documents. The recommendation is to keep the original paper checks in tamper-evident bags by date of deposit under lock and key.
Susan A. Goins, assistant vice president, is a Treasury Management Officer in the Business Banking Department at Fifth Third Bank. Reach her at (513) 326-4333 or [email protected].
