Remote deposit capture allows business customers to deposit checks on-site at their business location, as soon as they are received. What could be better than having a check deposited into the company’s account almost as fast as it comes through the door?
While there definitely are major benefits to remote deposit, there are some issues the prudent manager should be aware of and some procedures that must be in place before committing a firm to remote deposit.
Smart Business spoke to Lori Wood, treasury management and public funds officer with FirstMerit Bank in Columbus, to find out exactly what a business needs to know about remote deposit capture.
What does remote deposit capture do?
Remote deposit allows business customers to deposit checks on site. The checks are scanned for deposit using a computer and check scanner that is right in the company’s office. The deposit is then transmitted to FirstMerit via a secure Internet connection. Check images and data are captured, inspected, corrected and balanced right at the customer’s location. Being able to scan and deposit checks on-site reduces transportation costs by eliminating trips to the bank and fees associated with couriers. It speeds up cash flow and working capital due to the extended cutoff time, and reduces paper-handling errors along with providing for a better audit trail. Saving time is essential to a company in today’s business environment.
What can a business expect to gain from remote deposit capture?
Remote deposit not only allows for scanning and depositing checks but also allows front and back images to be stored for 24 months by the bank, at no additional cost to the business. Image files can be searched based on amount, posting date or account number. Employees can use time gained from the elimination of trips to the bank in a more productive manner. This change in the deposit process enables your corporate staff to focus on more value-added tasks within the company.
What does it cost?
Although every bank will be different, the cost of such a program is fairly comparable across most major banks. Customers should check with their treasury management banker for promotions and pricing. Remote deposit capture is sold through your bank’s treasury management department. Customers are welcome to make their initial inquiry with any branch banker or by contacting their commercial or business banker. The treasury management banker will help them with the set-up and training.
What are the risks involved in remote deposit capture?
There are several risks that should be taken into account with this product, and it is not meant for everybody. Clients retain the deposited checks for a maximum of 14 days per NACHA rules (National Automated Clearing House) before they are destroyed. As long as the customer has possession of the original check, the customer could unintentionally or intentionally deposit the check through a bank branch in addition to remotely depositing an image of the check. Checks must be secured and maintained with proper security procedures. Other risks could include employees of the client or third party stealing the checks and depositing them. Holding onto the original check creates an opportunity for fraud, funds availability exposure, kiting and forged endorsements.
Do I have to be doing online banking?
Yes, it is the responsibility of the client to reconcile all deposits the next day. While not unusual, this is something that must be worked into the accounting department’s daily workflow for deposit capture to be successful.
Isn’t there a danger of losing control of my cash flow?
Quite the opposite. Remote deposit helps improve cash flow by extending the cutoff time of making deposits for same-day credit.
Is it possible to deposit checks into multiple accounts?
Yes, the typical remote deposit program can handle up to 999 different business accounts. The client simply clicks on a drop-down box and picks the account to deposit the funds into. Should the client have offices in remote locations, a check identifier can be placed on that location for easy tracking of each separate location’s deposit.
Are there certain computer requirements for remote deposit capture?
Yes. We recommend that our clients have a high-speed Internet connection along with certain hardware and software specifications. Most businesses will meet those specifications, but, sometimes, remote offices might require upgrades.
LORI WOOD is an officer in the treasury management, public funds banking group with FirstMerit Bank in Columbus. Reach her at Laureen.Wood@firstmerit.com.