Automating Accounts Payable and Increasing Direct Deposit Enrollment

1. Automating Accounts Payable and Increasing Direct Deposit Enrollment Presented by: Kimberly Feeney, Vice President Government Treasury Services Bank of America 312-828-2582

2. Agenda • Automating Payables: Options • Outsourcing Check Processing • Automated Clearing House • Wire Transfers • Commercial Cards/Purchase Cards • Direct Debits • Direct Deposit • How it Works • How to Increase Participation

3. Automating Payables: Why? What are the benefits to your District? • Reduced Costs • Straight-through processing • Minimizes redundant data entry • Greater • Data accuracy • Access to data • Information sharing • Creates stronger partner relationships • Frees up resources

4. Automating Payables:How is this possible? • Enhanced Technology • Internet • Integrated Financial Systems • Trusted and Knowledgeable Partners • Alternative Payment Options • Automated Clearing House • Wire Transfer • Purchase Card . . .

5. Automating Payables: What are your District’s Options? • Outsourcing your Check Processing • Automated Clearing House (ACH) • Wire Transfers • Commercial/Purchase Cards • Direct Debits: (initiated by your vendor)

6. Automating Payables: Outsourcing your Check Processing • Eliminate internal security issues • Elimination of equipment repair, maintenance and upgrades • Reallocation of resources • Check issuance file can be integrated with your Bank’s positive pay & reconcilement services

7. District creates a file of payments 1 1 District transmits the file to your Bank 2 Transmission of file to check production utility 3 Checks printed and mailed 4 2 A listing of checks produced is sent to your Bank 5 A Check Issuance file is passed to Positive Pay 6 Mailed checks are delivered to vendor 7 Vendor deposits check at local bank 8 Bank compares checks received against Issuance to make Pay/No Pay decision 9 6 9 3 Transmission of Checks Print-run Data 8 5 US MAIL 4 7 Checks Outsourcing your Check Processing File of Payments Your School District Check Production Service Check Production Software Positive Pay/Reconcilement Software Issuance File Vendor’s Bank Check Production Utility Vendor

8. Automating Payables: Automated Clearing House (ACH) Credits • Electronic funds movement • Increased • Flexibility • Productivity • Fraud protection • Accommodates vendor invoices data • Better control • Easier reconcilement & cash forecasting • Electronic Advices • Flexible initiation methods • Data file delivery • Online • Simple

9. Automated Clearing House (ACH) (3) (2) Your Vendor’s Bank Account District’s Bank’s ACH system ACH NETWORK • The District creates an ACH file for processing • (2) The District’s Bank’s ACH system processes and delivers the ACH transactions to the ACH Network. • ACH Network delivers ACH payments to your vendor’s bank. • Vendor’s bank posts ACH payments on the settlement date. • (5) The District’s Bank’s ACH system reports ACH processing confirmation to the District. (1) (5) (4) Confirmations ACH Transactions District’s Vendor Your District’s accounts payable system

10. Automating Payables: Wire Transfers • Electronic funds movement • Better control • Finality of settlement • Provides immediate availability of funds • Extensive security features to guard against fraud • Flexible initiation methods • Data file delivery • Online

11. Domestic Wire Transfers (2) (3) FEDERAL RESERVE BANK Your Vendor’s Bank Account District’s Bank’s Wire Transfer System OUTGOING WIRE TRANSFER • (1) The District creates an ACH file for processing • (2) Your District’s Bank’s wire transfer system processes and delivers the wires to the Federal Reserve. • Your District’s Bank delivers Fed Reference numbers to your Bank’s Information Reporting System. • (4) Wires are paid to the District’s vendors. (1) (3) (4) District’s Vendor Your District’s accounts payable system

12. Automating Payables: Commercial/Purchase Cards • Multi-purpose • Single source for managing purchases • Streamlines payments process • Flexible billing and payment options • Pre-defined spending controls • State-of-the-art • Fraud detection • Security monitoring

13. Automating Payables: Direct Debits to the District’s Payables Account • Electronic funds movement • Reduces processing expenses • One time set-up • Increases • Flexibility • Productivity • Fraud protection(Blocks/Filters) • Improves cash forecasting • Better payment control

14. Automating Payables: Why? What are the benefits to your District? • Reduced Costs • Straight-through processing • Minimizes redundant data entry • Greater • Data accuracy • Access to data • Information sharing • Creates stronger partner relationships • Frees up resources

15. Direct Deposit • The Electronic Transfer of a Payment • From your District’s account into the checking or savings account of your Employees. • Most Popular Applications • Direct Deposit of Payroll • Expense reimbursements

16. How Direct Deposit Works • Your Employee signs a Direct Deposit of Payroll authorization form. • Form signed once - provides the account number, transit routing number, and other information about the employee (Voided Check) • Your District will send an ACH origination file • Your bank will send the file through the ACH Network. • This file should be sent at least two days prior to the Effective Date /Payday. (Effective Date is the date the funds are credited/debited from the account) • The Receiving Bank will post the credit transaction to the employee’s account on the effective date

17. Employer Benefits Reduces office costs in labor, paper, and storage space One of the easiest benefit programs to implement Easier account reconciliation in comparison to check payments Reissuing costs regarding lost or stolen checks are done away with, including stop payment fees Streamlines payroll to one application Employee Benefits Paychecks are electronically deposited into any type of account and available for spend on payday Saves employees’ time – no more waiting in lines at the bank Employees know that the money is always there on payday without exception, reduces overdrafts Payment stubs can be printed for employees with their pay information No cost to employees Eliminates missed checks for sick and vacation days Win-Win for Both Employer and Employee

18. Common Direct Deposit Pain Points Persuading Employees to Enroll • Prefer to receive the paper check – routine of depositing the “paycheck” • The number one reason of those surveyed that have access to Direct Deposit and do not use it, is a perceived lack of reliability • Other reasons include having control over finances • Uneasiness with technology and security with it

19. How to Boost Enrollment • Create a plan of action • Human resource and payroll departments are key to promoting Direct Deposit • Educate employees on the benefits of Direct Deposit • Saves time and the enhanced security of a check never being lost or stolen • Use internal newsletters to promote and educate • Invite your local financial institution to set up an information booth

20. How to Boost Enrollment cont. • Use eye-catching Direct Deposit inserts to anyone receiving a paper check • Have existing employee advocates of direct deposit spread the word • Keep authorization forms within easy reach • Make direct deposit the preferred payment method • If allowed - mandate it

21. Common Direct Deposit Pain Points Obtaining Employee Bank Account Information • Part-time or temporary employees – hard to setup a recurring electronic deposit • Employee does not have a bank account • Employee does not know how to give correct bank account and transit routing number information

22. Transforming your Payroll Approach: Payroll Cards • Card-based solutions enable School Districts to offer electronic payments to part-time or un-bankable employees • Payroll cards are re-loadable • Can be transmitted to your bank in the same file as direct deposits • Widely accepted • Custom logos are available

23. Transforming your Payroll Approach: Group Banking • Partner with your local Bank • Offer checking accounts to employees • Demonstrates your commitment to your employees • Increased employee satisfaction – which leads to greater productivity • Excellent Employee Benefits: free checking, free online banking, special discounts on mortgages, interest paid checking accounts

24. Common Direct Deposit Pain Points Need assistance with Marketing Plan • Do not have an internal marketing plan • Need sample brochures and direct deposit authorization agreement • Do not have a common area to market effectively

25. Marketing Resources • Your servicing bank • Your payroll vendor • Review guidelines and information at the following websites: • www.nacha.org • www.directdeposit.org • www.directpayment.org

26. Automating Payments: Payables and Payroll What are the benefits to your District? • Reduced Costs • Straight-through processing • Minimizes redundant data entry • Greater • Data accuracy • Access to data • Information sharing • Creates stronger partner relationships • Frees up resources

27. Thank You Presented by: Kimberly Feeney, Vice President Bank of America 231 S. LaSalle Street Mail Code: Il1-231-06-12 Chicago, IL 60697 (312) 828-2582 Kimberly.Feeney@bankofamerica.com