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Arkansas Department of Finance and Administration

ImageScan’s RemitTrac helps Arkansas Department of Finance and Administration Revenue Division improve turnaround times and reduce errors for more than 2.5 million paper payments annually.

With some hundreds of thousands of checks and paper tax forms arriving monthly, including more than double the average volumes on peak days, things could get backed up fairly quickly at the Arkansas Department of Finance and Administration Revenue Division (DFA) in Little Rock. Manually sorting, capturing data from, and indexing these checks and forms was a labor-intensive and time-consuming job. Delays in the processing of tax submissions led to customer service issues, as well as lost interest on funds deposited with the bank.

To improve the efficiency of its tax processing operations, the DFA has turned to payment processing specialist ImageScan, a Lanham Maryland-based software provider. ImageScan helped the DFA cut its tax processing time in half, improve customer service, and reduce errors with checks being submitted to the bank.

Overview: Managing 75 Different Tax Types

The DFA acts as a bureau for processing all tax payments made within the State of Arkansas. This includes sales, corporate, individual income, fuel, and many other types of taxes. In all, the DFA is responsible for receiving and distributing $4.7 billion worth of annual revenue, representing 75 different tax types, and coordinating the distribution of documents and information to the various departments. Almost half of this total, or $2.2 billion, is received in the form of paper checks and tax forms.

These transactions arrive at the DFA in many combinations, such as single form/single check, single check/multiple forms, and multiple checks/single form. In many cases, payments are either being combined or split among multiple agencies. The DFA’s Cashier’s Office is responsible for capturing and reconciling payment data, submitting checks to the bank for cashing, and providing accurate payment information to the multiple agencies within the state government. To ensure that tax documents can be located for reference and customer service, the DFA is also responsible for applying a document locator number (DLN) to each transaction.

The Challenge: Reducing Errors and Turnaround Time

Until recently, the DFA was key-entering all its transaction data directly from the paper checks and forms. It also was manually stamping DLNs on the tax forms. Because these processes were so labor intensive, they were very time consuming. This presented a problem, especially during peak payment periods. Each day a check sat at the DFA’s office, it was costing the state a day of lost interest on the money it represented.

There were also customer service issues related to locating documents waiting to be processed. Taxpayers would phone the agency inquiring on the status of their payments, but if the DLN number had not yet been applied, locating the correct documents could be challenging.

In addition, the DFA’s checks historically were processed separately from the tax documents they arrived with. This created dual data entry operations, in which the total from a check couldn’t be readily cross-checked against data from the tax documents. Separating the checks and tax forms also led to mistakes when matching up transaction data after it had been captured.

Manual key-entry of payment data that is not validated or cross-checked is also prone to errors.  For the DFA, these errors created extra steps when clearing checks with its bank.  For example, if the amount of a $110 check was incorrectly keyed as $100, a process had to be followed to correct it.  This involved the DFA buying back the check from the bank, adjusting the data related to the batch of checks, and resubmitting the $110 check for the correct amount.

To see how ImageScan provided a solution to deal with these challenges See White Papers