A Fortune 500 provider of global procurement, payment and travel services, with 181 billion dollars in assets sought to reduce its total cost of ownership (TCO), associated with its front-end and back-end remittance processing, to just 80%. Managing an annual volume of more than 30 MM paper remittances in-house required significant investments in equipment, labor, system licenses, and PCI-compliance audits. To off-set some of these costs, the firm wanted to downsize and consolidate its in-house operations. The firm was also getting bogged down with multiple software licenses, in-house ACH clearing systems, and contracts that were due to expire.

The firm selected Exela as its primary out-source provider for its remittance processing operations. Currently, Exela processes an annual volume of more than 30MM payments for the firm. Outsourcing its remittance operations, including its manual keying and depository functions, provided the firm with a means of reducing its total ownership costs. The implementation encompassed a phased approach, beginning with front-end operations, and continuing with IT/back-end processes, including ACH clearing, quality assurance and depository functions. Working together with Exela, the firm completed a successful migration from its previous remittance platform, US Data Works, to Exela’s TMS system. The firm’s ACH engine, which was also expiring, was replaced with Exela’s solution.

Today, we provide the full spectrum of paper and electronic payment processing services including:

• Commercial and retail LockBox processing services
• Electronic LockBox services
• Remote remittance LockBox spoke

• Improved processing turn-around times, from 3 ½ days to 48 hours
• Decreased the firm’s total ownership costs by 20%
• Dedicated Relationship Management
• Continuous SLA Achievement: Payment post accuracy (99%); timeliness; duplicate payments; exceptions; decisions processing errors; misposts
• Continuous Improvement: Since partnering with Exela, this firm has benefited from several system upgrades; process improvements and service extensions.
• Risk Mitigation: By entrusting it’s auditing and compliance activities to an expert. the firm was able to reduce its risk of regulatory non-compliance

When it comes to processing tax returns, people expect the government to respond in a timely and efficient manner. Many local and state governmental organizations still rely on outdated, physical paper-based workflows when processing consumer tax returns—opening the door for processing delays and errors, not to mention risk from a lack of standardization across departmental systems. Without automation, agencies struggle to: keep up with evolving compliance and security regulations; handle seasonal peaks in volume; absorb added labor costs; and implement uniform quality control procedures. New mandates from U.S. law-makers for wide spread, systemic changes are propelling agencies towards a complete over-haul of existing forms processing operations.

Alabama’s Department of Revenue (the Agency) was just one of hundreds of governmental organizations looking for outside help to modernize its forms processing environment. It was struggling to absorb costs associated with hiring and supervising seasonal workers to handle peak season tax return volumes, as well as labor required for data-entry and mailroom functions. To add to this, a new change to the hiring process was implemented, which required background checks for all temporary workers. The agency was experiencing a huge bottle neck and long processing delays during tax return preparation, caused by older remittance processing hardware and software; and large paper backlogs. Tax payers were beginning to send in duplicate checks with their returns, which was a big source of the problem. Because its remittance process was entirely paper-based, it could take more than 14 days for customers to receive refund payments. Due to the sensitive nature of information, and the growing potential for tax fraud, it was also important to have stringent security and risk mitigation procedures in place. Finally, the agency needed to update its current system to enable electronic and web-based reporting; for greater transaction transparency and workflow governance.

With taxpayers dissatisfied with long processing delays; the limited storage capacity and inconvenient location of its stand-alone warehouse; and mounting hiring and facility maintenance costs, the Agency decided that it was time to make a change. After weighing the options, the Agency determined that outsourcing to a seasoned provider was the best and only option. It selected Exela as its outsourcing partner because of its decades-long history of providing remittance services to large governmental organizations.

Leveraging Exela’s expertise and proprietary digital technology, the Agency could now streamline and modernize all aspects of its remittance operations. Replacing manual workflows would significantly improve the customer experience by reducing payment cycle times and minimizing security risk. To help further reduce over-head costs, and create more jobs for Alabama residents, Exela worked with the State to construct a brand new facility that would replace the Agency’s on-site warehouse. All of the Agency’s remittance operations would be transferred to this facility.

The partnership with Exela began in the year 2000 with the implementation of keying services, with additional services added incrementally over time to ensure a seamless transition. Today, Exela manages the entire spectrum of the Agency’s remittance operations including:

• Opening envelopes and removing contents
• Preparing and scanning returns
• Data keying
• Image capture and storage
• Quality review and assurance
• Document destruction

Exela processes approximately 3,100,000 pieces of mail and 1,000,000 checks during the course of the year. During peak seasons, volumes can reach up to 15,000 transactions within a single day, translating into a capture of more than 1,000,000 keystrokes annually. Documents are converted to digital images utilizing Exela’s proprietary, high speed IBML technology for high quality image output, and to ensure that scanned images are exact (or better) duplicates of original documents.

To date, Exela supports the Agency’s evolving remittance needs by providing:

• End-to-end tax return processing for: individual income tax; corporate tax; withholding tax; sales and use tax; crash records/accident reports; and other misc. taxes
• Voucher and tax return payment processing
• Modernized image hosting and archival platform
• Web-based remittance and volume reporting
• Data processing support for refunds, filing extensions, and other exception items and correspondence
• LockBox services/remittance processing including Check 21 (managing 1.1 million dollars in transactions per year)
• Middleware Software Security and Testing (MIST); development of techniques and procedures for vulnerability assessment
• Online customer exceptions management
• Fraud detection and prevention system
• Mail room services including, a certified mail receipt tracking system for packages receipt notification
• 2-D barcoding system

Since the full implementation of services, Alabama’s Department of Revenue has benefited from a complete transformation of all aspects of its forms and remittance processing operations. By automating and streamlining its workflows, the Agency has realized significant cost-savings, greater accuracy rates and quicker processing turn-around times. While, implementing stricter security measures and controls enabled the Agency to reduce the number of fraud incidences; resulting in additional savings. With the implementation of Exela’s solution, deposits can be made multiple times a day versus daily or bi-weekly. As a result, insufficient funds can be recognized sooner. This enables the Agency to quickly proceed with communication and collection activities.

Specific accomplishments include:

• Reduced average tax return turnaround from 14+ days to 24 to 48 hours
• Implemented 2D barcoding capabilities to capture data with 100% accuracy and same day turn around
• Executed archival scanning processes for closed withholding and envelopes, among others
• Reduced state-employed data entry and mailroom staff by 250 full time employees
• Experienced $2 to $4M annual savings through W-2 fraud detection and prevention
• Eliminated a 30,000 square foot warehouse
• Significantly improved revenue collection and float reduction by re-allocating resources towards hiring more collectors and depositing return payments at a faster rate
• Modernized its reporting system to include, web-based reports, electronic remittance reports, and electronic daily volume reports; creating greater transparency and accountability
• Eliminated Unisys Check Transports and Software, which saved the state hundreds of thousands of dollars in annual software and maintenance fees
• Reallocated 165 full time employees to concentrate on critical tax collection activities
• Redistributed 12,000 square feet of space to employee classrooms and training rooms
• Achieved processing accuracy rates of no less than 99.5%

Faced with increasing economic pressures, an expanding geographic footprint and more demanding customers, financial institutions are choosing to outsource peripheral lockbox processing functions and re-focus efforts on upgrading and expanding core offerings. Aside from the obvious cost-savings implications, relying on the expertise of a dedicated LockBox provider can offer businesses several strategic advantages. Amid a rigid regulatory landscape and growing privacy concerns, the need for effective security controls and enhanced compliance measures is more important than ever. And, many organizations don’t want to be burdened with added investments in state-of-the art equipment and emerging technologies. By outsourcing their LockBox operations, financial institutions are finding new ways of diverting and re-allocating resources and expenditures for improved productivity and competitive gain.

As one of the top 8 financial institutions in the U.S., this firm was searching for opportunities to maintain its competitive edge in a continuously evolving and demanding marketplace. Delivering superior products and customer experiences was at the forefront of its priorities. But, extensive resources were being pulled away from its core banking operations to manage its LockBox processing activities, spread across six different cities. The bank was also struggling to keep on top of emerging technologies and the latest industry best practices, while, at the same time, trying to improve customer retention and acquisition rates through exceptional customer service. Although the bank has been outsourcing other onsite operations to Exela for the past 30 years, it wanted to take the next step towards total re-allocation of resources. Customer data security and privacy were additional considerations for the bank.

To advance its strategic agenda, and leverage the expertise and technology of others in this space, the bank made the decision to outsource its LockBox operations. It sought the assistance of a specialized technology provider that was well-versed in executing large, onsite remittance implementations. It selected Exela because of its vast network of talent; versatile service-delivery model; technologically-advanced applications; and experience managing operations across multiple sites. The solution, valued at 100 million dollars, has expanded in scope to include the following:

• LockBox Processing: Exela is charged with overseeing and executing all aspects of the firm’s LockBox operations across six locations; utilizing existing facilities and equipment. As part of the end-to-end solution, Exela manages mail retrieval; image and data capture; archival; delivery; remittance; and the secure transfer of customers’ information.

• Worked with HR to establish a transition team

• Employee Conversion: To complete the total transfer of LockBox operations, Exela added over 600 on-site bank employees to its workforce. This is in addition to the more than 1,500 employees that have been re-badged during this partnership. To ensure a successful conversion, the following procedures were completed prior to implementation:

  • Collaborated with bank staff to determine important goals for the transition process

  • Established a transition team by working with Exela’s Human Resources and Recruiting departments

  • Implemented peer to peer support and knowledge transfer programs for transitioned employees

  • Scheduled regular cadence and toll-gate employee reviews

• Robust Disaster Recovery/Business Continuity Plan

  • Recovery procedures and recovery time objectives for each application or critical infrastructure

  • Roles and responsibilities of technology recovery teams

  • Communication plan

  • Procedures on how to invoke the technology recovery plan(s)

  • Dependencies on other plans (including technology)

  • Prioritization strategy

  • Back-up procedures including frequency and retention

• Enhanced Governance Model

  • Weekly meetings, status calls, gate reviews

  • Dedicated project manager

  • Constant communication among key client and Exela stakeholders

  • SharePoint team site

  • Established product requirements / assumptions / constraints

  • Developed team action report

  • Implemented project cost controls

  • Utilized status dashboard

  • Instituted steering committee consisting of high-level Exela management

  • Initiated change control process; internal audits and sponsor feedback procedures

A partnership with Exela has produced several positive results. Most notably, is a cost savings of $40 Million over the last 10 years. The bank has also achieved 99% of its performance goals. Leveraging the resources and expertise of an established LockBox provider has allowed the bank to dedicate its operations to the development and delivery of core banking products, while delighting customers with exceptional service. Some additional benefits include:

• Minimal investment in equipment ownership and maintenance

• Continuity of labor and employee wages

• Mitigation of privacy and information security risk

• Opportunity for future process improvement and cost-savings

• Courier service/mail delivery reliability

• High level of processing accuracy

• Consistency of workflows across bank sites

A large not-for-profit animal welfare organization based in Boston was in desperate need of a more updated, efficient and cost-effective remittance processing solution. Handling thousands of payments in the form of checks, cash, and credit cards was a daunting task. It relied largely on manual intervention and legacy equipment. The company realized that their traditional, remittance processing system was no longer sustainable. Workers were required to sift through donations, scan checks, and manually process cash and credit card payments. This was both costly and cumbersome, consuming valuable resources that could be more efficiently utilized in other areas. Any exceptions had to be manually handled, usually involving additional reviews and re-scans. Moreover, the entire process, from receipt to deposit, was taking up to 4-5 days. The organization could also benefit from more reliable marketing data for effective and targeted campaigns aimed at soliciting sponsorships. There was no efficient way of collecting and integrating customer profiles into their existing CRM system.

As the number one remittance provider, Exela was uniquely positioned to take over and improve the organization’s operations. Utilizing high-speed intelligent scanning and data capture technology, a large portion of the workflow was automated. By digitizing data capture and payment processing activities, and creating a more streamlined approach, less workers were required; human error minimized, and deposits expedited. As an additional advantage, the platform supported multiple forms of payments, including check, cash, and credit card.

Exela managed all aspects of the organization’s sponsorship payment operations. The solution began with mail pick up at the local post office; followed by opening, preparing sorting and batching. Next came image and data capture, utilizing advanced intelligent scanning equipment and Optical Character Recognition (OCR) technology. Images were then delivered to the client via an FTP server. Payments are automatically batched; data corrected and completed, and business rules implemented. Exceptions review and reconciliation takes place via a secure, online portal. Deposits are then prepared, along with with ICL and Accounts Receivable (AR) files, and dispatched to the bank. Exela also provided a donation repository archive, so the organization could view images and host their Gift Aid images for HMRC returns.

To assist the organization with its marketing campaign efforts, Exela was able to extract pertinent data from sponsor correspondence to import into its marketing tool. The organization uses this to upload sponsor data into its customer relationship management (CRM) system. Any opt out customers are identified and flagged, enabling the organization to update customer profiles accordingly.

• Client is able to obtain and utilize sponsorship data captured from correspondence to inform and enhance future marketing campaigns
• Significant cost savings by automating traditionally manual processes and replacing outdated legacy systems
• Greater adherence to regulatory and data security requirements; comprehensive security control framework and oversight
• Decreased payment processing time from 4-5 days to 48 hours
• Reduction and or/re-allocation of labor resources
• Automated exceptions for faster reconciliation and approval