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Details of Tax Processing Solutions

> A Taxing Problem

Tax processing operations for most state or municipal agencies is a cyclical, paper driven business that presents many challenges:

  • Yearly and quarterly volume peaks present impose volatility on staffing levels and training needs.
  • There is a wide variety of form types, envelope sizes, W2s and other attachments that need to be handled
  • Forms printed by tax preparers, web and PC software programs have subtle variations of layouts, and come both with and without 2D bar-codes. 
  • Payments need to be allocated to hundreds of different account types, determined by a myriad of complex business rules and processes
  • There are frequent changes to all of these variables.
  • State and municipal budget deficits are putting an increasing premium on rapid and efficient collection processes

To accelerate deposits, many agencies have introduced payment vouchers – a coupon sized document with a scan-line to accompany check payments.  The payment voucher allows processors to utilize retail lockbox systems to capture and deposit payments.  However, use of payment vouchers is less than was expected (frequently less than 50%)   forcing agencies to create “dummy remits” resulting in increased handling of the documents ands thus to deposit delays.  This situation has led to the creation of two completely separate data capture systems one where vouchers are present and one where they are not.  Thus there are often two servers, two ICR engines, two sets of reports and statistics, two supervisors and therefore much higher costs.

During peak processing periods, it is not uncommon for check payments to be backlogged for days, or even weeks.  The cost of lost interest for even a short deposit delay can amount to hundreds of thousands of dollars per year at a time when agencies are faced with increasing labor, training and outsourcing costs and when budget cuts and hiring freezes are the norm. 

The ImageScan Solution

Leveraging its experience supporting large, complex payment lockbox operations, ImageScan systems are designed to sort and distribute document images rather than paper.  Pre-sorting is reduced to three categories - check only, documents with checks, and documents without checks and by using the latest mixed document transports from NCR, IBML and OPEX, everything from thick overnight envelopes to onion skin W2 forms can be processed at speeds that are geared to the volume to be processed.  Checks are accurately identified and physically sorted to special pockets on the transports which can also be used to encode and endorse checks as well.

For remote branch operations, ImageScan supports remote check and document scanners to further accelerate deposits, while maintaining centralized control over the process and the implementation of approved procedures.  These deposits can be made via paper, image (Check 21) or Accounts Receivable Conversion(ARC) to a clearing house. ImageScan solutions can also handle credit cards and other electronic forms of payment.

Form Processing Flexibility

The solution employs the most accurate and efficient workflow in the industry combining CAR/LAR (Courtesy Amount Read/Legal Amount Read), MCAR (Enhanced Machine-printed Amount Recognition), Image Amount Entry and Amount Reconciliation.  The solution ensures that tax payments are available for deposit with exceptional accuracy and speed. Tax forms are processed using accurate forms processing and ICR technology, including:

  • 2D and 1D Bar Code
  • Form ID by shape, size, content, bar-code, or logo
  • Image pre-processing supporting drop-out or non-drop-out inks
  • Support for color images
  • Utilization of the most accurate ICR engines available
  • “Free form” capabilities to adjust to variations of form layout
  • Integrated business rules to flag errors in real-time
  • Fast presentation of highlighted fields so operators do not have to navigate forms
  • Remote Web based image data entry
  • Tools for creating snippets or redacting certain data fields from view for security
  • Multiple entry passes (different fields by different operators for increased security and performance
  • Comprehensive statistics and reporting

Special tools are also available such as for prioritizing specific tax types, flagging and prioritizing large amounts, looking-up taxpayers by MICR account, and flagging delinquent taxpayers.  Since most tax agencies do not have the staffing, budgets or time for complex application development cycles or for outsourcing this effort to vendors or third parties, ImageScan solutions are specifically designed for fast applications development by operations staff.  Extensive menus using GUI check boxes eliminate the need for custom programming or release scripts.  New forms or payment types are brought into production quickly.

Solution Benefits

  • Fast, accurate and manageable collections processes allowing same day deposits,
  • Any document type can be handled
  • New forms can be setup by your own staff rather than outside vendors or programmers
  • They are priced to provide a compelling return on investment
  • There is  real-time access for research and tools for exporting image, index and data to all major document management repositories
  • Refund documents are expedited with reduced penalties and lower inquiry levels.

If the challenges your organization faces have some or many of the components highlighted above then you would probably benefit from getting in touch with us. We can then start to assess how we might be able to help you process your tax collection more efficiently.

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