Most school districts in Ohio still rely on traditional check payments, with approximately 80-90% of payments made by check. While some districts have started to branch out to ACH (Automated Clearing House) and virtual credit card (VC) programs, each has its own challenges. ACH, while a step toward modernization, still leaves districts vulnerable to fraud, as storing bank information in accounting systems can expose them to cyber threats. Districts that have tried VC card programs often find themselves overwhelmed by the amount of time and effort required to set up and manage these systems. By contrast, solutions that offer a fully managed approach by leveraging a trusted third-party payment provider in partnership with the largest and most trusted banks in the country have an advantage. This automated solution handles everything from setup to vendor communication, allowing districts to simplify payments and reduce risks.
The Risks of Checks, ACH, and Credit Card Payments
1. Checks: High Vulnerability to Tampering
Paper checks have long been the standard for payments, but they are especially susceptible to tampering. For example, a fraudster could intercept a check, alter it, and cash it under a different name. This type of fraud is costly and time-consuming for districts to resolve, adding stress and uncertainty to their financial processes.
2. ACH Payments: Cybersecurity Concerns
ACH payments are convenient but can expose sensitive banking information if handled in-house. By storing bank account information within a school’s accounting system, districts make themselves potential targets for phishing and cyber-attacks. A single data breach could compromise banking information, making districts vulnerable to fraud.
3. Credit Cards: High Maintenance and Management Effort
Credit card programs are another alternative that some districts have explored, but they come with their own complications. Managing a VC card program requires setting up each vendor, tracking spending, reconciling accounts, and handling vendor communications. This added administrative workload often takes more time and resources than anticipated, making it a less-than-ideal solution for already-stretched district staff.
Why School Districts Are Switching to Automated Payments
More districts are recognizing the benefits of moving to a comprehensive automated payment solution which offers a secure option that takes the burden off staff in partnership with a trusted national bank. Administrators can initiate payments with the click of a button, while the system handles all the backend work. This approach saves time, reduces security risks, and eliminates the need for complex vendor management.
Advantages of Automated Payments
Switching to an automated solution offers benefits that go beyond just increased security:
- Reduced Labor and Material Costs: Each check comes with hidden costs, including labor, materials (checks, envelopes), postage, bank processing fees, check reconciliation, and managing lost checks. Automated payments eliminate these costs, allowing districts to allocate resources more effectively.
- Streamlined Vendor Communication: Unlike other credit card programs, where districts must reach out to vendors themselves, an automated payment system like Bonefish Pay handles this for them. This saves staff time and ensures smoother vendor relationships.
- Increased Efficiency: Automated payments reduce the need for manual processes, speeding up transactions and reducing the likelihood of errors or delays.
Moving Ohio Schools Towards the Future of Payments
In Ohio, most school districts still rely heavily on checks, while some are experimenting with ACH or VC card programs. However, each of these options comes with significant drawbacks when managed internally. Automated payment solutions provide a more secure, efficient, and cost-effective alternative, freeing up district resources to focus on education rather than administrative tasks.
By adopting an automated solution, Ohio school districts can enhance security, reduce costs, and give staff more time to focus on what matters most – supporting students and schools. Automated payments aren’t just a new trend; they represent a smarter, safer way forward in school finance.
Taylor Forthofer is the Director of Marketing & Client Services for Bonefish Systems.