Remote Deposit Capture: Is it for you?
By Chris Kilian, Vice President / Compliance Scott Valley Bank
Remote Deposit Capture (RDC) is one of the more significant developments in the banking industry in recent years. The basic feature of this service allows a user to scan checks and transmit the scanned image electronically to the bank for posting and clearing. The obvious benefits of this service include convenience, more efficient deposit availability, and a significant reduction in transportation costs and associated risk. It is a service any company that regularly deposits checks should be considering.
Legislation passed in October 2003, commonly referred to as “Check 21” makes this process possible. The legislation allows banks to clear checks based upon electronic images of the original items, rather than having to transport original items back to the paying bank for clearing. Companies who utilize an RDC service are certain to gain some significant benefits.
The RDC service allows a company to capture checks in their own office and practically eliminates the need to transport checks to the bank. This added time savings and additional processing time can translate into a longer period for a company to process checks. Additionally, items deposited through an RDC service have extended cutoff times for deposits. For example, at Scott Valley Bank an RDC deposit can be made as late as 6:00pm and still receive same day credit. Manual or paper deposits made at most branches are limited to a cutoff time of 4:00pm. With faster clearings and availability, you will improve cash flow and working capital. With these increased efficiencies, a company can save time and money by not having to travel to the bank.
A frequently asked question is, “What do we do with all these cleared checks, and what about cash?” The RDC user is responsible for the safekeeping and destruction of cleared items and ensuring RDC scanned items are processed only once. This means you will need to develop safekeeping abilities and a destruction timetable. As far as cash goes, RDC only applies to checks drawn on banks in the United States. So, if you receive cash payments, you’ll still need to make deposits or use an armored cash service.
If you think this service may benefit your company, check with your local relationship banker to help determine whether your company is a suitable candidate for remote capture services. Time is money. Companies have more and more demands on their time than ever before, and services like RDC can be an integral part of your strategy to be more efficient and control costs. The ability to scan and deposit checks directly from your business location makes working with the bank in processing your checks easy and cost-effective. And, the Bank likes the service for all the same reasons. It’s a win-win for everyone.