REENGINEERED CASH RECEIPTS PROCEDURES
The task of opening envelopes and comparing remittance advices against customer checks is labor-intensive, costly, and creates a control risk. Some organizations have reengineered their mail room procedures to effectively reduce the risk and the cost.
The mail room clerk places batches of unopened envelopes into a machine that automatically opens them and separates their contents into remittance advices and checks. Because the remittance advice contains the address of the payee, the customer will need to place it at the front of the envelope so it can be displayed through the window. When the envelope is opened, the machine knows that the first document in the envelope is the remittance advice. The second is, therefore, the check. The process is performed internally and, once the envelopes are opened, mail room staff cannot access their contents.
The system uses special transaction validation software that employs artificial intelligence capable of reading handwriting. The system scans the remittance advice's and the checks to verify that the dollar amounts on each are equal and that the checks are signed. Any items that are inconsistent or that the validation system cannot interpret are rejected and processed separately by hand. The system prepares a computer-readable file of cash receipts, which is then posted to the appropriate customer and general ledger accounts. Batches of checks are sent to the cash receipts department for