Aspen Saves $30k Outsourcing Payment Processing

In an effort to cut costs and increase efficiency, the City of Aspen, CO, is outsourcing its payment processing. Using a system of lock boxes, the City now has all tax and utility payments and mail from residents opened by its bank in Denver. For details on this effort and other outsourcing methods, read on

What Happened?

Aspen’s finance department recently decided to outsource the tasks of collecting and opening mail from residents, as well as depositing into bank accounts. The city estimates the outsourcing strategy will save $30,000 in processing costs.

The Goal

According to the Aspen Daily News, the city opened separate lock boxes with its bank, Wells Fargo, to process local utility payments, sales taxes from businesses and business license payments. The lock boxes will cost the city about $48,000 annually, which is about $30,000 than the annual $78,000 annual salary of the accounting specialist who normally completed the processing tasks.

The city eliminated the accounting specialist position when the current employee retired. Officials then reevaluated the processing of business license payments and realized investing in the lock boxes was more efficient than completing the job in-house. As many payments to the City are sent throughout the year, it is easier to have them directly transported to the bank in Denver for processing than taken care of intermittently in Aspen before being mailed to Denver. From an efficiency standpoint outsourcing helps alleviate a rush of payments at one time. Typically Aspen would get 2,500 business license payments all at the same time - a difficult task for just one person to handle.

Outsourcing And The Cloud

A recent study published in the Asian Journal of Business Management discussed the growing popularity of outsourcing financial duties made possible by cloud computing technology and accounting solutions. Cloud computing resources allow organizations to store information virtually, making data and communication sharing easier, faster and more secure. Through cloud-based technology, organizations can outsource financial tasks to service providers located in remote locations while reducing costs and increasing efficiency.

The study explained how cloud computing was first launched in the IT sector and has since transitioned into financial applications. Cloud computing accounting tools are projected to evolve in the near future, making financial outsourcing a common practice in large enterprises and municipalities worldwide.

Historically, financial outsourcing involved static data, making it difficult to adjust to market demands or changes. Today, financial outsourcing enables updates and interactions in real-time, allowing information to evolve and decisions to be made quickly and accurately.

Pros and Cons

  • Organizations are outsourcing to become more competitive while simplifying financial tasks. The advantages of financial outsourcing include:
  • Reducing the costs associated with financial processing and department maintenance
  • Enhancing quality of management and work compliance by partnering with expert service providers
  • Enabling organizations to adopt advanced management strategies to address business needs for long-term success
  • Strengthening control over accounting demands to ensure organizations are in compliance with regulatory standards

However, to successfully optimize cloud-based financial outsourcing solutions, municipalities must adopt the necessary technologies and best practices to keep operations running smoothly. The study warns against:

  • Falling victim to communication obstacles when information sharing and connectivity solutions are lacking, which connect the organization to the service provider
  • Requiring too many connections to complete a task as each data transfer threatens the information’s authenticity and reliability, as well as slows down the completion process
  • Failing to adopt the appropriate security solutions to keep all information transferred in the cloud protected from corruption, data loss or other breaches
  • Overlooking the need for uniformity in all data transfers and processes when working with a provider located remotely

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