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Today’s residents expect digital payment options at their fingertips and near-instant remuneration when it comes to the money they’re due.

Unfortunately, government agencies have been slower to implement digital payment methods than the private sector due to budget and workforce constraints. These constraints often increase the government’s reliance on outdated payment technology and present avoidable inefficiencies.

Challenges Presented by Paper Checks

One of the biggest opportunities for governments to increase efficiency is with payment disbursements for things like child support, unclaimed property, jury duty, restitution, unemployment, rebates, government benefits, and more.

Traditionally, such disbursements have been made in the form of cash or paper check, but both create a variety of problems:

  • Convoluted processes.
  • Extended check-processing times.
  • Delayed and lost checks.
  • Check reissuance.
  • Check fraud.
  • Cumbersome, time-consuming bank reconciliation.
  • Escheatment.
  • Dissatisfied residents.
  • Labor-intensive customer service support.

Additionally, there are the burdens placed on overwhelmed staff, exorbitant costs associated with checks, and audit issues related to cash handling.

The Future of Payment Disbursements

The good news is agencies considering the move away from outdated payment methods, like checks, don’t experience much risk when making a change. There are numerous examples in government where digital disbursements have made a big difference in cutting costs, creating efficiencies, and improving resident satisfaction.

With the adoption of digital disbursements by thousands of government agencies to date, several best practices have been established. The following nine-step guide can help your agency on the road to payment progress.

1. Examine Your Current System

Where are you now? The first step in determining if digital payment transformation makes sense for your agency starts with looking at who you pay and why.

Paper checks are probably your primary form of disbursement. Or, if you're using cash to make disbursement payments, you know all too well the hassles of obtaining and handling paper money.

How many disbursements do you make annually? How much time does it take for your team to complete? How much are you spending on check costs? The cost to issue a check is, on average, $7.78 each[i], with some instances as high as $20[ii].

2. Determine Why You Haven’t Changed

Change is almost always scary and comes with a plethora of potential pitfalls and issues. The question is: What’s been holding you back? Does your team hold onto a mindset of, “It’s always been done this way?” Are you encountering resistance from employees?

The fact is digital payments and disbursements are no longer new. Chances are you routinely make and receive digital payments. Most of us have developed a trust in technology and enjoy the benefits that come with such advancement. Despite trepidations, digital disbursements are the new norm, destined to become the new tradition.

3. Define Your Current Process

Whether it’s issuing payments to vendors for products or services necessary for your agency to properly operate or paying residents the money they are due, your agency has established disbursement procedures in place. You should take a hard look at the following:

  • Workflows.
  • Exceptions for returned, missing, and lost payments, as well as check fraud.
  • Customer service processes.


4. Take Stock of Available Resources

Identifying the resources currently used to perform disbursements should be straightforward.

  • List the people involved in your disbursement workflow and their role at every stage. Include personnel ranging from those on the agency side who participate in the initial request for payment, as well as employees in accounts payable, your mail room, and others.
  • Examine tools and equipment used in the disbursements workflow—office programs, accounting software, computers, printers, ink (toner), internet routers, postage machines, copiers, phone systems, etc.

5. Examine Weak Links in Your System

A thorough analysis of any system or process includes identifying weaknesses.

Oftentimes, organizations operate using workflow processes that were long ago developed in answer to issues and scenarios that existed at the time and that are far different from those that exist today. Issuing paper checks is a great example.

Inefficient processes, employees, lack of resources, and many other factors often cause bottlenecks to occur, which are disruptive and can strain—and even stifle—workflow in a system. Some examples include:

  • Reviews required at multiple stages in the workflow.
  • Misrouting of files or documents between departments.
  • Understaffed departments.
  • Overworked, overwhelmed, or dissatisfied employees.
  • Resident dissatisfaction—delayed payments, difficulty cashing checks, and more.

6. Rethink and Rework

At this point, you will have reviewed all the steps in your disbursement process, identified resources, and taken the time to pinpoint and understand weaknesses in your system.

While there are many possibilities when it comes to reengineering your disbursements system, there are some key areas where you should focus:

  • Eliminating previously identified inefficiencies.
  • Combining steps where possible to reduce the need for reviews and approvals at multiple points in the process.
  • Implementing tools that track workflow and progress in real time and that hold each employee accountable for the timely completion of work.
  • Adopting new technology or services to cost-effectively manage major parts of your disbursement operations.

7. Pinpoint the Benefits

The benefits justify the need for undertaking the project, so it’s important to know in advance what to expect before ever beginning such an endeavor.

What are some of the potential benefits of switching from paper checks to digital disbursements?


  • Augments understaffed teams.
  • Reduces customer service needs.
  • Provides opportunities to take on work that might be viewed as more meaningful.
  • Improves job satisfaction.

Residents (payment recipients):

  • Enables residents to decide how they get paid.
  • Improves payment speed.
  • Empowers payees to track payments so they know exactly when they will be paid.
  • Increases resident engagement and satisfaction.
  • Provides multiple ways to pay unbanked or underbanked individuals.

8. Seek Out the Best Solution

You’ve decided it’s time to ditch paper checks and go digital. The big issue at this point is how to select the best solution for your needs. Now, you can begin your search for potential providers in the digital disbursements space in earnest.

You will want to request the following information:

  • Experience: time in business, work they’ve done with government clients, case studies, references, etc.
  • Brief description of the solution and how it addresses your issues, concerns, and needs.

Take time to contact references provided by the companies you’ve shortlisted. They will be able to provide insight into how the solution worked, any problems, results obtained, and much more.

9. Prepare for Implementation

Two areas you’ll want to consider before making a decision are implementation and support. Poor implementation can kill projects from the start.

Support is equally important. As such, discovery in these areas must be done before making your final decision regarding a potential solution provider.

Here are some sample questions to ask:

  • Will the solution interface with your software systems of record (i.e., accounting, court management, case management, jury management, etc.)?
  • Does your IT department need to be involved? If so, to what extent?
  • What is the implementation process?
  • What’s the implementation cost and how long will it take?
  • Can it be done while maintaining current work?
  • Is there additional equipment or software to purchase?
  • How much training will be required?
  • Who will train your people, and is that included in pricing?
  • Will there be a need for ongoing training?
  • What ongoing customer and technical support will they provide and are there enhanced levels if necessary (ask for their service level agreement or SLA)?
  • Is there a dedicated support person or team your office will work with?

You’ve Got This!

Government agencies are experiencing tremendous benefits as they make the transformation from cash and paper checks to digital disbursement systems. Done right, they haven’t had to disrupt their processes for payment. Making that switch could completely transform the way you serve your community, creating tremendous cost savings for taxpayers, while increasing resident and employee satisfaction.



[i] Aberdeen Group

[ii] Wall Street Journal,


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