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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Joe Grey
October 2007

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Remote Deposit

Joe Grey,
Associated Bank-Twin Cities
651.554.8719
joe.grey@associatedbank.com
www.associatedbank.com

Remote deposit can
help firms manage cash

IN RECENT YEARS, management of commercial funds via remote deposit has grown rapidly, as a wide range of industries have begun to embrace the practice.

Like most areas based on technology, it is evolving daily, and just as businesses are becoming more comfortable with remote deposit, they need to stay abreast of enhancements that can benefit them even more.

Remote deposit allows customers to deposit checks by scanning them from their office by computer. Those that appreciate the service the most have employees spending a great deal of time preparing check deposits and bringing checks into the bank.

With remote deposit, funds become more readily available, as bank deadlines expand to allow later same-day deposits. Meanwhile, bank check-clearing networks continue to enhance their use of check images, and increasingly do not require checks to be physically printed on the back end as a substitute check for purposes of clearing the check.

Companies that look at the cost of this process are often surprised at the time and expense related to deposit activities. For companies that hire a courier or armored car service to bring checks into the bank, the costs are very tangible.

Two cases

One of our clients is a travel agency that was frustrated with having to manage local depository relationships in other large cities where they do business. They use remote deposit to consolidate all their depository relationships with the bank.

They no longer require separate depository accounts in Sacramento, Chicago and New York. This saves them considerable money on depository expense and allows them next-day access to funds to pay down their line of credit.

We also serve a title company that has benefited greatly from the later deposit deadline and check-clearing improvements that remote deposit provides.

Like most title companies, they were caught in the squeeze of getting paid by check for home sales and having to wire out proceeds for home closings. Wires always need to be sent based on collected funds. They had to borrow to cover the float portion of check deposits.

With remote deposit, the amount of float and subsequent borrowings has gone down considerably, saving this title company hundreds of dollars each month in borrowing costs.

Is it right for your company? A banker can do a cost/benefit analysis to quantify the potential savings of remote capture.

For companies with many different locations – for example, title companies, property management companies and retail stores – costs in terms of lost productivity due to gathering and depositing funds can really multiply.

Such companies often have many people involved in the process, coordinating deposits among numerous bank accounts, plus there can be tracking issues at corporate headquarters and delays if the payments are centralized for deposit to a specific bank. Remote deposit can alleviate this.

In contrast, businesses that aren’t the best candidates for remote deposit are those that receive large amounts of cash or where credit cards and other forms of payment represent the majority of daily deposits.

As part of their analysis, businesses need to consider upfront costs of implementing a remote capture program and how much time it will take to recover those costs.

All remote capture systems are based off a check scanning device and the software or Internet-based system to support it. There is a wide range of scanners available, from devices that require each check gets fed individually, to scanners that can scan upwards of 100 checks per minute.

Ideally, a remote deposit provider should be able to provide both a “thick client” option, based on software, as well as a “thin client” option, based on the Internet. The thin client has the advantages of no software to maintain and better networking and accessibility, but the thick client processes high volumes of images much more quickly as there is not an Internet connection to slow down the review and image creation process that happens on each item scanned.

It’s important to note that many companies also have Internet policies that limit employee access to external sites and may preclude the use of a thin client environment.

The decision of buying, leasing, or using bank-owned equipment must be considered. What will happen if the equipment breaks down or needs servicing?

Changes ahead

Remote deposit is rapidly evolving. Only a couple of years ago this technology was unheard of. A more recent development has been to combine remote deposit with the new ability for consumer checks to be converted to electronic clearings.

With some restrictions, checks written by consumers can now be Automated Clearing House) payment system that many businesses are familiar with.

Bank remote deposit services are starting to allow for the dual payment stream. Consumer checks are converted to ACH and business checks are cleared as images. One significant question is, how much advantage is there to converting a percentage of checks to ACH as check float declines under the image clearing arrangements.

There may not be any real advantage in terms of improved funds availability or clearing expense. Many companies still like the ACH option as a way to gain more certainty of payment.

Companies are also looking for better back-end reporting of deposit activity with tracking across many different deposit points and the ability to download payment information into their accounts receivables systems. Some hope to expand the process to scan and capture data off payment coupons or invoices.

Coupon processing and matching is like having an in-house lockbox program to manage payment documents as well as checks.

Businesses that are interested in these types of services should consult with their provider about what is available, and how these evolving services could help their bottom line.