Check Imaging Drops Utility's Operating Costs

South Placer Municipal Utility District (SPMUD) provides sewer collection and treatment services for northern California residents via 237 miles of pipe with nine pump stations and processes hundreds of check payments each day. When the utility's legacy payment processing system — a tabletop scanner setup — started suffering from both hardware breakdowns and limited software options, SPMUD sought a solution from Bancsource, a reseller already providing equipment maintenance services to SPMUD.

"Their previous software was somewhat cumbersome and didn't provide the full range of capabilities they needed," explains Russ Porter, western sales director for Bancsource. While Missouri-based Bancsource sells and maintains hardware such as item processing equipment and ATMs to banks, credit unions, and other businesses, it also offers total hardware/software options to support that equipment, which enabled it to meet all SPMUD needs. Porter explains that the utility had been keying payment data from checks by hand and delivering deposits to the bank in person, a situation it wanted to eliminate. With the Check Clearing for the 21st Century Act (Check 21), federal legislation effective in 2004, checks can be processed electronically and remotely deposited, an option the utility's existing software didn't offer. "As a public utility company, they wanted a simple solution for processing payments internally and then transmitting the money to their bank for instant deposit [via remote deposit]," adds Porter.

Leverage Existing Relationship For Growth
Because of the four-year relationship SPMUD had with Bancsource, it asked it for assistance with the new system, which was a $23,000 investment. The integrator recommended pairing RP Solution ExpertRPS remittance/check processing software with a Canon CR-180 scanner to handle the utility's check imaging and payment processing needs. Bancsource also suggested RP Solution ExpertICE archival and retrieval software to burn digital check images to CDs for archival purposes. "The utility was not interested in remote deposit software offered by a particular financial institution, but rather wanted a solution that could be used even if they switched banks," says Porter.

Once the software was paired with the Canon scanner's batch capabilities, the utility could process up to 200 checks and other payment coupons at a time. "This utility was processing 500 to 1,000 checks a day, including business checks, personal checks, and money orders," says Porter. "This solution resolved the failing hardware [scanner] issues. And, by implementing ExpertRPS, they can more efficiently process their checks and payment coupons, and that provides the utility an opportunity to streamline its workflow." Not only does it have more reliable hardware, but SPMUD staff are also doing less data entry because the software performs data recognition automatically. The software also uses the scanned check images to create ICL (Image Cash Letter) files, which the utility uses to send deposits electronically.

Use Technology To Reduce Processing Time, Staffing Needs
It took six weeks to migrate the utility from its legacy system, with Bancsource removing the old hardware, installing the new scanner and software, and training employees for a day and a half. Because ExpertRPS integrated with the utility's existing accounting platform, there was very little downtime when the transition occurred in February 2008. Porter says once SPMUD was set up to transmit deposit files to its bank, operations started to run much more smoothly. In the meantime, savings of time and money have already been realized. "They ended up with a much more reliable piece of equipment, but perhaps the biggest improvement is in processing time," says Porter. "The hardware is quicker, the software is improving the flow, and they have also eliminated the need for deposits delivered in person. All of that saves them in terms of operational costs."

Porter says Bancsource, which traditionally works with financial institutions on the receiving end of the process, has begun working with businesses such as utilities as they start to take advantage of Check 21 and implement item processing solutions. Often, new accounts, such as SPMUD, come via references from existing clients.
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