Operations Flashcards
What are the common steps in Day 1 Paper Item Processing?
- Receipt
- Proof & Encoding
- Setup
- Capture/sort
- Reject Repair & Re-Entry
- Balancing
- Transit Dispatch
- Bulk File
- Settlement, Reconciliation, & Float Management
What is Receipt?
The physical movement of paper cash letters.
What controls are included in Receipt?
- Confirmation of Receipt
- Verification of source and control totals
- Hand off to Proof & Encoding
What is Proof & Encoding and the general steps?
Process that prepares unencoded deposits from various departments for the capture process.
* Encode amount and missing MICR info
* Balancing which may involve creating adjustments
What is Setup?
Process that reviews encoded work and adds control documents to prepare for capture.
What is Capture/Sort?
Process where the MICR line is mechanically read by various capture equipment to capture MICR info, segregate on-us items and control docs, and sort all other items by transit destination.
In which Day 1 process would you do any of the following steps?
* Remove and retain for Day 2 any customer paperwork, tapes, totals or other backup documentation.
* Match physical checks delivered to cash letter listing for accuracy.
* Identify settlement account and insert credit to the batch.
* Identify and seperate “Special sorts” from the workstream.
Setup
What types of items would be considered Special Sorts?
- Controlled Disbursement
- Lockbox
- “Special Handling” customer deposits
- Large dollar item review
What is the process where items that could not be processed in the initial capture are repaired to attempt to capture the MICR information in a subsequent process?
Reject Repair & Re-Entry
Why was the TIFF standard created?
To assist with interoperability across financial institutions.
ASC X9.100-181
Why was the X9 TR2-2005 developed?
To promote greater uniformity in the design and production of checks, which will improve processing and handling throughout the check processing system.
X9 TR-2:2005 - Understanding, Designing and Producing Checks
Under what conditions can a reclamation be initiated against the presenting bank?
- Check was presented for payment over a forged or unauthorized endorsement,
- When a benefit check was negotiated after the payee’s death, or
- When the check was materially altered
What is the time limit on reclamation action?
One year from the date the check was presented for payment if the payee is Deceased and One year & 180 calendar days if the payee is Not Deceased.
What is the presenting bank liable for if a reclamation is received?
The principal amount of the check; and if applicable, accrued interest, penalties, and administrative fees.
What are the 3 Reclamation status codes and what does each one mean?
A. Items at least 90 calendar days old.
B. Items for which a protest is being considered.
C. A reclamation and/or accrued interest , penalty charges, and adminstrative fees that have remained unpaid for at least 120 days after the reclamation date.
