July 07, 2010
MONTPELIER, Vt.— The check is in the mail. State officials hope to see that statement quickly become a quaint reference to a by-gone era as vendors receiving payment from the State of Vermont switch to electronic payment.
The Department of Finance and Management reports that last year Vermont State government issued 200,000 paper checks to VISION vendors compared to just 33,000 electronic payments. It’s estimated that the State incurs a savings of $1 to $3 for every check converted to electronic payment. If vendors made the switch to electronic payment, it would result in a significant savings for the State and added security and convenience for vendors. Recently, the department and the State Treasurer’s Office teamed up to urge vendors to sign up for electronic payments via the Automated Clearing House or ACH.
“ACH is a secure network used to connect banks to each other,” said Department of Finance and Management Commissioner Jim Reardon. “It is through this network that direct deposits, electronic payments, certain transfers, and debit-card payments are processed. ACH provides vendors with immediate availability of funds and reduces the risk of lost or stolen payments.”
Once vendors are signed up for ACH they may then use a secure online system called Vendor Portal that was developed by the Treasurer’s Office. Officials hope vendors will be motivated to switch to ACH in order to take advantage of key services the portal offers, which includes direct 24-hour access to payment information.
“Vendors may view their payment advice on the same day the money is deposited instead of waiting days to receive their remittance advice in the mail,” said State Treasurer Jeb Spaulding. “We hope the added convenience of direct access to payment information will enable vendors to complete their internal accounting practices more quickly and securely.”
The system provides vendors with a summary page showing each payment and amount by date. By clicking on any payment number, the vendor may view payment details that include the department the payment is from, invoice number and date, voucher identification number, amount paid and the type of payment. An estimated 500 vendors currently are registered for the Vendor Portal.
The City of Burlington and the University of Vermont are two vendors who have used the portal since it was first made available early last year. Cynthia Parker of UVM’s Office of Treasury Management says the portal is a big time-saver, with internal payment confirmation work that used to take minutes per remittance now taking just seconds. Laurel Moffatt in Burlington’s Treasurer’s Office is impressed by the speed of payment notification.
“Sometimes the payment notice is on the Vendor Portal before it even hits the bank. I no longer have to wait for the remittance to arrive in the mail to post payments to our general ledger. The information in Vendor Portal has become my back-up,” explained Moffatt.
The bottom-line for the State in encouraging the switch to electronic payments is increased efficiency and savings. The actual savings is incurred through lower costs for mailing, paper products, and personnel time to process a payment. Nationwide, businesses find it is less expensive to process an ACH transaction than issue a check. The State Treasurer’s Office reports that ACH related bank charges are just five cents per transaction. In fiscal year 2009, 5,000 vendors received 11 or more paper checks from the State. Converting just these transactions from paper check to ACH represents a savings to the State of several hundred thousand dollars.
A mailing to vendors in May and June by the Department of Finance and Management and Treasurer’s Office has resulted in a steady sign-up for ACH. To switch to an electronic payment, a vendor only needs to fill out a one-page “Vendor ACH Authorization Form” that is processed within two to three business days. The form is available for printing from the finance department’s web site or may be obtained by calling either the department or Treasurer’s Office. Once signed up for ACH, vendors may go online to the Treasurer’s Office web site and register for the portal.
Vendors wanting more information on ACH or Vendor Portal may go to the Department of Finance and Management’s web site at www.Finance.Vermont.gov or call (802) 828-0676; or may contact the Treasurer’s Office through a toll-free-in-Vermont number at (800) 642-3191 or via the web at www.Vermont.Treasurer.gov and selecting Vendor Portal on the right side of the page.
Source: Office of the State Treasurer
Last Updated at: July 07, 2010 11:43:10