A month ago, State Treasurer Velda Jones-Potter announced the success the Treasurer’s Office has had in shifting vendors from check payments from the state to ACH payments. The release, posted on Jones-Potter’s blog highlighted that 76 percent of Grant-in-Aid recipients have converted to ACH (electronic) payments.
Through July, 20 of 312 vendors had signed up for ACH payments. Between July and October, 201 additional vendors had signed up for the program – bringing the total to 221 out of 312 Grant-in-Aid vendors.
Check payments cost the state approximately $50 per check. ACH payments cost only $1 per transaction, saving the state $49 per payment. This savings results in nearly $11,000 in savings quarterly, or just over $40,000 annually.
According to the Treasurer’s office, they are now working on converting more vendors to the ACH program, which could result in additional savings.
To date 70% of the fire and ambulance services receiving Grants-in-Aid have converted. Further, the the state gets a percentage back on each dollar once ACH payments exceed $70 million.
The savings from this switch will not solve the state’s budget problem. However, the small savings can add up and are exactly the type of move that should occur.