Efficient Online Bill Paying: Best Practices
2008 GFOA Conference Fort Lauderdale, Florida
Debby Cherney Director of Finance Irvine Ranch Water District Irvine, California
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Case Study: Irvine Ranch Water District • Provides water and sewer services to a population of 330,000 in Orange County, California • Approximately 94,000 water and 88,000 sewer connections • Developing area: Connections have increased over 73% in ten years
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Electronic Payment Trends
• The “Early” Days – 2002 to 2006
Direct Debit (13%)
Manual Transactions (80%)
Other (7%)
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The Next Generation of Online Bill Payments • Customer service
• • • Expectations of a savvy customer base Elected Board’s focus “Green” initiatives – reduce paper through eBilling initiatives Challenge with home banking payments Reduce costs
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Finance
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Challenges with Home Banking Payments • Time-consuming & expensive paper-based processes • Payment errors – high cost to process returns
– Customer owed $25.41, but forgets the decimal point and pays $2,541.00!
• Inaccurate customer information • Timing • Cumbersome reporting
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IRWD’s Solution: Paymode (Bank of America) • Benefits:
– Streamlined processing – Reduced exceptions through account number validation process – Integrated with home-grown Accounts Receivable processing system – Detailed on-demand reporting – Payment returns are simple, fast – Reduced handling expenses
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How Does It Work?
Payment initiation Payment sent to Concentrator Service Payment sent to PayMode
Data Option #1 Web Reporting w/Download
Biller receives credit
Consumer Service Provider (CSP)
Consumer initiates Home Banking payment
Concentrator Service
Funds to Bank for Settlement Data Option #2 AR File
Biller reviews receivable information via PayMode Web browser
Data & Funds
Data & Funds
Batched by Biller ID
PayMode Integration Server
$
Data Option #3 CTX
Biller's Internal Systems
Biller posts receivables information
Consumer Service Provider
Initiates ACH debit from Consumer's account Sends payment file to Concentrator Service
Concentrator Service
Produces daily file of all Billers' transactions Each Biller's transactions are batched with a total credit per Biller Payment file contains individual CIE payments
PayMode
Pulls Concentrator file daily from Concentrator Service Translates CIE information to customer specified format (CCD credit w/data available via PayMode, CTX w/CIEs as 820 remittance advice, or single CCD or CTX credit) Releases credits to Billers in Biller specified format
Billers
Receive email notification from PayMode that payment has been credited Notification provides link to view remittance information for online inquiry Customer -specific file format received into Biller's AR
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Source: Bank of America/Paymode
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Online Reporting
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eBilling Initiatives: Customer Adoption
eBilling Adoption
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2Q06 3Q06 4Q06 1Q07 2Q07 Quarter 3Q07 4Q07 1Q08 2Q08 eBilling
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eBilling Initiatives: Customer Adoption
IRWD Remittance Distribution
100% 80% 60% 40% 20% 0% 2002 2003 2004 2005 2006 2007 2008 Calendar Year M anual EDS/Custom Direct Debit E-Receipts
Manual reduced from 80% to 50%
Initiative launched
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Customer Outreach
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Sample Email
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Sample eBill
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IRWD Website
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eNewsletter
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Critical Success Factors • Implementation
– – – – Finance & IT Partnership Project Management Communication Documentation
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What’s Next? • Continued customer outreach • Goals:
– Further reduce manual remittance processing from 50% to 33% – Extend customer self-service capabilities
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Questions? • Contact information:
cherney@irwd.com (949) 453-5350
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