6 Questions to Ask When Shopping for a Remittance Solution

By Mark Brousseau

Buying a remittance processing solution has never been easy. But the combination of emerging payment and clearing channels, expanding systems integration requirements, and new customer service demands has made the process more confusing than ever.

To add some clarity, Wally Vogel (wvogel@creditron.com), founder and CEO of Creditron, Inc. (www.creditron) offers the following six questions to ask a prospective remittance solutions vendors.

1. How much opening and pre-sorting is required before scanning incoming remittance work?
Bearing in mind that there are often several steps required to move from unopened mail to stacks of clean sorted documents, which some remittance solutions require, Vogel suggests looking at the remittance solution in the context of the end-to-end operation. "Look for a vendor that can integrate with an efficient mail opening system and handle a variety of transaction type without requiring pre-sorting," Vogel advises.

2. What about payments that are made in person or over the web?
The mix of payments has changed and will continue to change, and spending money on a solution that only handles mail payments no longer makes sense, Vogel says. "A remittance platform worth investing in should have fully integrated cashiering, web payments, and credit card payments, with consolidated deposits, accounting updates, and reports," Vogel says.

3. Have you successfully interfaced with our ERP/accounting system/billing system/content management software before?
This is an area of potential hidden costs and problems if not addressed upfront, Vogel warns. "You have a significant investment in your information systems, and front end capture points such as remittance processing need to work seamlessly or the result will be unexpected integration work by your IS group, or worse, unforeseen problems with your data down the road," Vogel says.

4. Have you successfully implemented Check 21 Image Cash Letter with our bank before?
This is another potential problem if your remittance vendor and bank are not on the same page, Vogel says. "Don’t get caught in between. Use a vendor that has already proven that they can work with your bank, or if your bank does not have a process and certification in place for working with third party vendors consider using another bank for image cash letter services and having the funds swept to your main bank on a daily basis," Vogel recommends.

5. Is this a fully proven and tested solution or will there be any customized code?
Unless you want to be a beta tester, you should choose a vendor that has completely standardized and proven code that can be configured to your needs through parameters. "Even a small block of customized code can cause problems with reliability or integrity, and make later updates problematic and expensive," Vogel explains. "Choose a vendor with a standard codebase and an easy method to upgrade to the latest revision."

6. Are you a Microsoft Certified partner?
"If you are putting wiring in your house, you insist on a licensed electrician. If you want legal advice, you look for a lawyer that has passed the bar. Similarly, if you are choosing a remittance software provider to work in the Microsoft Windows environment, you should insist in a Microsoft Certified Partner," Vogel says. "This ensures that you are dealing with a professional and qualified organization which has made the investment in certifying their people and products before asking you to make an investment in their solutions."

Do you have any tips you can share?

You Get What You Pay For -- Even With Remittance Solutions

By Mark Brousseau

When making a purchase, everyone like to "get the best deal." In these difficult economic times, with costs being carefully scrutinized, that is more true then ever.

So, when it comes to remittance solutions, what is the best deal, and what is the true cost?

"A neighbor and I replaced our roof shingles at about the same time last summer," recalls Wally Vogel, president of Purepay Receivables Automation (wvogel@pure-pay.com). "My neighbor proudly told me that he paid half the price to his roofer for the same job. 'The roofers are all the same,' he said. Right? When I heard this I felt that maybe I should have obtained more quotes (I did get two), or shopped around more. But this spring when my neighbor had water leaking into his house in three places, and was unable to track down the company that did his roof, I felt sorry for him. But I also felt better about the value I received for my money. The lowest price does not always represent the best value."

What's true for roofers is also true for remittance processing solution providers, Vogel cautions. "They are not all the same, and choosing the wrong one can be an expensive error," he says. "Saving some money upfront won't seem like such a good idea when your system is down, or you have errors and inefficiencies keeping your organization from making your deposit deadlines."

Vogel says users need to ensure that they are getting a solution that will truly meet their needs, before they consider the price. "Missing features could result in extra manual keying and sorting, which will reduce the time savings of the solution," Vogel explains. "A poor user interface could result in operator errors which are expensive to correct and can cause customer service issues. And a cheaper scanner could jam more, have poor image quality and a lower read rate, resulting in less throughput and more errors."

There are other hidden costs as well. Some of these may be obvious, such as higher costs for maintenance, Vogel says. Others may not come to light for a year or two, when it's time to change a step in the process. "This is when users discover that they need to pay more for custom changes that wouldn't be necessary with a more flexible remittance solution," he says.

Another hidden cost is the time and effort required by a biller's staff, and its IT department, to implement the solution. "Purchasing a less expensive system which takes twice as long to implement, or purchasing from a company which does not have efficient project management in coordinating the interfaces, testing, and training required will result in internal costs that could well exceed the savings when compared to a truly turnkey solution from an organization with a professional implementation and delivery model," Vogel says.

So, when seeking the best value in a remittance solution, Vogel recommends that billers look beyond the sticker price and consider:

... a full set of time saving features (e.g. no need to sort multis from singles, MICR match for check only, account number reading for consolidator checks, ICR roping of long lists)
... ease of use and user interface (e.g. one key zoom, color coding, easy to read fonts)
... quality of the scanner hardware
... maintenance costs
... costs for future changes and upgrades
... time to complete implementation
... quality of project management from vendor
... expectation of your IT involvement

"Taking these and other factors into consideration will help ensure that you truly obtain the best value and that you will be satisfied with your remittance solution in the long run," Vogel says. "Checking references, talking to others about their experience with the vendor, and visiting other client sites is a great way to assess what you can expect from a vendor and what type of value they will deliver over the long term."

"I have heard some say that remittance solutions are commodity items and that they just want the lowest price," Vogel concludes. "If anyone still believes that, I say let's talk. We can meet at my neighbor's house. But you might have to bring a bucket if it's a rainy day."

What do you think? Post your comments below.