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City of Philadelphia may implement use of check scanners

Businesses - and cities - can miss out on plenty of revenue by not properly addressing checks that don't clear the bank. Officials in Philadelphia recently discovered this the hard way, when it was found the city lost nearly $350,000 by failing to follow up on bounced checks. Inefficient communication practices and delays resulted in some individuals and companies paying the city with bad checks on more than one occasion, and the city estimates that in the last six years, it has received 692 of these payments, which are thought to total up to $720,000.

At a time when many local governments are eager to increase the amount of revenue they receive and seek additional funding, many officials are in disbelief over the situation and cannot fathom how so many workers failed to collaborate and create a solution for the checks that didn't clear. As a result, Mayor Michael Nutter has named Thomas Knudsen the city's first-ever chief revenue collections officer, in hopes he'll be able to implement practices that will ensure Philadelphia won't continue to miss out on revenue from these checks.

How will the city cope with this problem?
As a result of this appointment, the city will begin to implement stronger practices to ensure it is no longer accepting bad checks and failing to follow up with those who wrote them. One of the initiatives that may be put in place will be a standardized system for officials to deal with this situation and facilitate more cooperation between departments to ensure bounced checks are handled promptly. More stringent law enforcement and stronger punishments of those who have a history of writing the checks may also help the city stop the practice.

However, one solution that has started to gather steam is the proposal that the city invest in check scanning machines that will ensure check payments to the city are transferred between accounts in a more timely fashion and expedite processes. Some businesses that receive many checks have already embraced this solution, as a check scanner speeds processing times and can prove more efficient than manually handling payments and waiting for them to clear at a local bank. If Philadelphia also implements this technology, its departments could see an improvement in its check processing policies and make it easier for departments to follow up with those whose checks haven't cleared.

April 26, 2013