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ACOM’s EZPayManager (MICR Laser Check Processing Solution)
Scores High Marks at San Joaquin County Office of Education
THE BACKGROUND
Situated in the northern end of California’s Central Valley,
San Joaquin County has nearly 110,000 students, grades
K-12, in seventeen school districts. Stockton Unified is the
largest of the districts with 34,000 students, however, seven
of the seventeen are small, rural one-school districts with
student populations numbering between 175 and about 300.
Size disparities among the districts made centralized
financial management and disbursements extremely
practical for the districts, and all but two assigned their IT
and warrant-issuing functions to the Stockton-based County
Office.
THE PROBLEM
Generating 50,000 payroll and 50,000 accounts payable
warrants (checks) annually in an aging, obsolescing
payment environment had became a strain on the human,
physical and financial resources of the San Joaquin County
Office of Education (SJCOE).
According to software development manager Matt Rosen,
SJCOE had experienced a litany of problems, many of
which are familiar to institutions and companies that employ
conventional check processing…
- Excessive operator intervention: to start a run, the
forms had to be retrieved from secure storage, logged
and aligned, and in the event of skips or jams, the entire
process had to be restarted with new check numbers.
- No back-up: if the printer broke down on payroll night,
for example, there was a serious problem. (Anticipating
retirement of the legacy system, SJCOE resisted further
investment.)
- Separate signing process: the signature process
presented yet another opportunity for jams and
alignment problems that could necessitate re-runs.
- Unattractive format: options for improving appearance
of the checks were limited with the use of a line printer,
as well as the limited ability to expand on the stub
information for employees and vendors.
- Returned checks: often, because of poor print
resolution, post office scanners would be unable to read
a payee address, so would read the return address and
send back the check.
- Preprinted check stock was/is expensive.
Even the disbursement process was somewhat clumsy,
Rosen says. To run payroll, for example, the payroll data
was first sent to the HP3000 from the Dell servers in the
payroll department for printing. Each file was then returned
to the Dell environment with the actual check number
assigned to each check. These files then updated the payroll
system so that the payment details could be examined when
inquiring by check number.
THE SOLUTION
Last year, SJCOE management authorized Rosen to find an
alternative.
With a decision to make a change, Rosen began exploring
options, and focused on the acquisition of a MICR laser
check printing solution. He looked at two solutions, one
from Troy and another solution from ACOM (which was
being used in the nearby San Joaquin County government
check disbursement system). The respective prices were
not far apart for the solution he needed, Rosen said, but he
determined that ACOM’s combination of capability and
flexibility, along with what he perceived to be a “partnership
attitude,” led to a decision for the EZPayManager solution.
Five months later, the situation had eased. Rosen had
found his answer.
Essentially, Rosen says, he wanted to eliminate the
bottlenecks, expense and security deficiencies associated
with the previous system and he found the solution in
EZPayManager.
EZPayManager is a modular integrated total payment
solution that enables enterprises to generate MICR laser
printed checks, as well as electronic payments, using
electronic check templates rather than preprinted checks.
It also enables enterprises to print or send remittance
information (pay stubs) via email or fax if they choose to
do so.
The EZPayManager total solution is comprised of the
following elements:
- Payment processing software
- Xerox laser printers, MICR-enhanced by ACOM
- Blank security check stock
- Secure-A-Card PCMCIA security cards and PCMCIA
readers for secure storage of company data, MICR lines
and signatures
- MICR toner engineered specifically for the printers to be
used
- Professional check-form implementation services
- Maintenance agreements
- Two No Risk ACOM guarantees: a 30-day total
satisfaction money-back guarantee, and a MICR
guarantee (which ensures the MICR quality of checks
generated will meet or exceed all American Bankers
Association performance standards and specifications
when used with the proper toner and check stock)
SJCOE purchased the total solution from ACOM, including
two 45 page-per minute Xerox DocuPrint 4525 desktop
MICR-enhanced laser printers (which allows splitting of
check runs to achieve performance levels that rival big
production printers), as well as implementation services for
both payroll and accounts payable.
THE IMPLEMENTATION
To make the change, Rosen established a four-phase
project plan for design, approval, implementation and
testing.
In the design phase, his team established the budget,
designed the file format and the check layouts.
With this accomplished, he presented the project to the “offline”
districts and sought their input. His team also
designed the procedures and controls they felt were
needed. For example, since the school system had
experienced check fraud attempts in the past, the project
team considered security a paramount objective, aiming
towards three levels of security: blank security check stock,
off-line signature cards, and printer/print server security.
The plan went out for financial approval and check layouts
were circulated for review by the districts.
In the implementation phase, the SJCOE team worked with
ACOM to obtain both the hardware and the software, and
provided the basis for setup of the EZPayManager software.
They also provided ACOM with the file and check layout
specifications as well as an implementation questionnaire to
serve as a cutover guide. ACOM set up the file formats
from SJCOE’s XML data format and created electronic
check forms replicating the “hard” formats provided. ACOM
then provided a CD of the full implementation to the SJCOE
team.
Additionally, ACOM set up a PCMCIA security card (to store
sensitive SJCOE information, graphics, MICR lines and
signatures). Two days of on-site installation and training
followed, and the solution went live in July 2002.
In the testing phase, two full check cycles were tested, with
both the old and new solutions running in parallel
operations. Checks were sent to the County
Auditor/Controller's office, to the bank, and to the postal
service and EZPayManager passed with honors.
Until summer 2002, SJCOE’s disbursement process was
performed in their IT department, using a Hewlett-Packard
3000 minicomputer. Cobol-programmed legacy software
designed specifically for school systems by the California
Education Computer Consortium (CECC) had managed the
data, with checks printed on preprinted tractor-feed
continuous check forms by the computer’s associated line
printer.
Today, most elements remain the same, but the difference
is that now, checks roll out of MICR-enhanced laser printers
in the IT department in a simple one-step process,
generated on blank security check stock instead of prenumbered
forms.
SUCCESS
The new system is straightforward and easy to use,
Rosen says. The EZPayManager software resides on a
Dell server on the SJCOE PC network. Accounts payable
check runs are scheduled every day, payroll runs twice a
month. When check runs are executed, the Secure-A-Card
is inserted into the PCMCIA card reader and the CECC
software is polled by EZPayManager, which imports the
data into its SQL Server, where the checks are formatted.
The formatted files are then spooled out to the MICR
printers, which generate the complete, signed checks on a
single pass. The completed checks are then either put in
the mail (accounts payable) or handed off to the various
districts for distribution (payroll).
What used to be a time consuming, expensive,
cumbersome and vulnerable process is now an easy onestep
operation, Rosen says. EZPayManager’s flexibility
allows him to display more information on check stubs than
ever before, and to modify the forms virtually at will.
Savings are significant. EZPayManager has helped
SJCOE recover valuable employee hours, save the cost of
preprinted forms, and save the cost of post-processing
equipment and maintenance. With two fast printers situated
securely in the IT department, fraud-proof blank check
stock, and company information safeguarded on a secure
PCMCIA card, EZPayManager has dramatically reduced
SJCOE’s risk of check fraud.
Rosen projects that he has reduced his annual check
production costs – excluding personnel -- from nearly
$15,000 to under $9,000, for a an annual savings of
nearly $6,000. He has calculated his return-oninvestment
(ROI) at three years over all. The manager of
business services has commented that the project was "one
of the smoothest she had ever seen.”
And moreover, Rosen says, “... we’ve solved the check
mailing problem and we no longer have 40 or 50 checks
returned to us each month. We have a great ROI and we
have a strong stable accounts payable and payroll
check production solution in place that will serve us well
for many years.”
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