Remote possibility Featured

7:00pm EDT November 24, 2006

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 joseph.matyas@pnc.com.