As the United States Postal Service closes facilities and scales back service, there is no shortage of companies looking to keep money moving with electronic transactions. Banks have been especially active in this area as they look to cut costs and adjust to new business realities. Many companies will address this situation by employing business process outsourcing.
Electronic transactions are a third the cost of processing checks, for example, and the savings grow with the volume. Another savings stems from time. If the Postal Service eliminates Saturday delivery, many invoices and payments will be delayed a day or more. Again, considering the volumes of transactions involved, the situation simply has to be addressed. If to make up for a slower Postal Service a company has to put in $4 million in additional working capital borrowed at 6 percent, that’s a $240,000 added cost.
Making the Case for BPO
The natural next question is whether a solution is available in-house or is more effectively achieved through business process outsourcing. There are established processes for making the right decision with respect to outsourcing. One consideration here that may not be so obvious: It is more advantageous than ever for businesses to work with a BPO company with locations near the operations the USPS will keep open to ensure prompt payment processing and the processing of other inbound mail.
BancTec’s Michael Alfonsi describes the risks in payment processing in the featured article “10 Risks Buyers Face in Outsourcing Payments” on Outsourcing-Center.com.
As vice president and managing director of financial services, Alfonsi knows the risk factors to consider and how to optimize the payments side of a business through outsourcing.
He addresses the impact of the recent changes at the U.S. Postal Service and what they mean for payment processing — both outgoing and incoming. By honestly evaluating the risks, a company can effectively outsource its payments.
To see the list of 10 risks buyers face when outsourcing, read editor Beth Ellyn Rosenthal’s full article here.
Today’s post is from Coley Clark, BancTec’s chairman of the board and chief executive officer.
This year marks BancTec’s 40th anniversary, and I would like to take a minute to recall how our company’s beginnings can be traced to torn checks.
It was 1972, the year President Nixon started the space shuttle program and Elton John topped the charts with “Rocket Man.” HBO launched its first subscription cable service as the BBC introduced the legendary quiz show Mastermind, known for its challenging questions and intimidating set.
Advancements in technology were taking hold, and automation was mastering any number of business tasks, among them check processing. But checks mutilated by machines couldn’t be quickly processed, and in that problem Merle Volding saw an opportunity. For less than $10,000, he purchased a stake in a Dallas company that had been unable to capitalize on its patent for repairing a damaged check by attaching a strip of paper to it using heat-sensitive adhesives.
Soon that company was BancTec, whose name highlights its technological expertise in the banking industry. And just a year after Volding founded BancTec, its first CheckMender system was installed in the Republic Bank of Dallas. The product proved successful, in part because it used a heat-sensitive adhesive that dried in milliseconds.
Today’s post is from Coley Clark, BancTec’s chairman of the board and chief executive officer.
This year is a special one for BancTec as we celebrate our 40th anniversary and reflect on the experience we’ve gained on the way to becoming a leading provider of financial transaction automation and document management services.
Our company began in a time of technological transition. Innovations of the day included the digital watch, the hand-held scientific calculator, and Pong, the first commercially viable video game. They all arrived in 1972, just as BancTec started designing and manufacturing check-repair and related systems for the banking industry.
Though we claimed the name BancTec to highlight our technological expertise in banking, our company aggressively expanded to hardware as well as software solutions used in a wide range of industries. The experience we’ve gained managing payment processing and document processing has given us an in-depth understanding of a myriad of client businesses. Since 1999, we’ve offered our Intelligent BPO services, now our primary focus and fastest-growing business segment.
We all take pride in the fact that today BancTec serves clients in 50 countries and operates 19 BPO centers around the world, automating processes for Fortune 500 and mid-size companies. We’re successfully leveraging our proprietary IP and deep expertise to deliver focused solutions across the financial services, insurance, healthcare, utility, transportation and government sectors.
After 40 years, its employees are keeping BancTec on the leading edge of technology and electronically transforming businesses processes in the era of the Internet, the tablet computer and the smartphone. I see this anniversary less as a milestone and more as a reflection of our experience. While 40 years in business is worth celebrating, it’s our 40 years of experience that matters.
Hill will discuss the major challenges that hinder the healthcare industry’s efforts to automate payment processing and offer solutions to achieve full automation.
Arvella Hill, healthcare business analyst for BancTec
“More than half of U.S. healthcare transactions are still paper-based. Additionally, there’s a processing lag if the payment is paper and the remittance electronic,” said Hill. “This represents one of the most costly and time-consuming challenges facing healthcare providers, billing companies and banks serving providers today.”
The session will demonstrate how BPO services can be a viable alternative for providers to improve remittance payment management. Optimizing the process through outsourcing can result in accelerated cash flow, increased recovery rate on denied claims and reductions in back-office expenses.
Learn more by visiting BancTec at Booth #155 during the summit, Jan. 26-28, at the Disney Contemporary Resort.
The U.S. Postal Service has been very important for the American economy and American society, and it gets no taxpayer money. But it must cut costs to get its finances back in order.
As BancTec’s Michael Alfonsi described last week, processing centers will be closed, and businesses will begin to get their receivables in later than usual. Companies will have to fund the difference in working capital in the future.
This change may ultimately cost businesses tens or even hundreds of thousands of dollars—all because of the Postal Service and remittance processing inefficiencies.
With BancTec, companies can work to overcome these challenges.
The U.S. Postal Service is seemingly always in the news for its efforts to reduce its costs. And some say its recent proposed changes would significantly impact the way companies do business.
As the USPS continues to close post offices and mail sorting centers, invoices will arrive later to clients—and cash will be available later still. That’s why it’s more advantageous than ever for businesses to work with a BPO company with locations near the operations the USPS will keep open, ensuring prompt processing of payments and other inbound mail.
Maria Allen, senior vice president and president of the Americas for BancTec, said, “The expansion of the Dallas Center of Excellence will significantly improve BancTec’s geographic footprint in the U.S. and increase its capacity in the wholesale and retail remittance space. The Dallas center will help us provide even better service and deliver the most efficient receipt and processing of payments.”
BancTec’s four major remittance processing centers are located in Dallas, Chicago, Charlotte and Phoenix, with three additional satellite facilities in Columbus, Ga., Philadelphia, and the New York metropolitan area.
BancTec expects to hire approximately 50 new employees and contractors for the Dallas expansion.
About 80 percent of invoices are still on paper, and it’s estimated that U.S. companies spend tens of billions of dollars every year on paper-based invoice processing.
By automating AP invoice processing, businesses can enjoy reduced cycle times, increased visibility into the process, improved vendor relationships and more.
Here are six reasons to consider automating your AP invoice processing:
1. Accelerate Cash Flow
The average Accounts Payable department makes 19 copies of each document, spends $20 in labor to file each document, loses one out of every 20 documents, spends $120 in labor searching for each misfiled document and spends 25 hours recreating each host document, according to a recent PricewaterhouseCoopers study.
With AP automation, you can reduce document storage and transmission costs, and take advantage of early payment discounts when your invoice processing is streamlined and automatic.
2. Improve Visibility and Planning
Visibility is a critical issue, especially with paper-based invoices. Replacing manual processes with automation prevents delays and unnecessary rush invoices. Lost or misplaced invoices become a thing of the past when you have easily accessible digital archives. Greater visibility also improves planning by allowing for more accurate budgeting and forecasting.
As the United States Postal Service closes facilities and scales back service, there is no shortage of companies looking to keep money moving with electronic transactions. Banks have been especially active in this area as they look to cut costs and adjust to new business realities. Many companies will address this situation by employing business process outsourcing.
