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."
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