Cost-Saving Ideas: Reviewing Your Revenue Collection Process

Improving your local government's receipt collection system may get revenue into its bank account more quickly.

Start by evaluating the costs and benefits of various revenue collection alternatives, using measures such as:

How long does it take to process a tax or fee payment?
How many total collections are being processed?
What is the cost per transaction?
How convenient is the process for residents?

By becoming more efficient, your local government can possibly increase collections, lower processing costs and increase interest earnings.

Use a Bank

Having a bank process payments on behalf of your local government can reduce the amount of staff time devoted to clerical duties. This may include use of a locak box.

Set up a contract with a bank to receive and process payments for your local government. (Payments can include real property taxes and special assessments which are collected with taxes.)
Ensure that the service provider complies with statutory requirements and that proper internal controls are in place.

Accept Credit Card Payments

Providing residents the option to pay for fees, fines, taxes or other charges by credit or debit card can enhance customer service and convenience. The governing board may authorize a service fee to be charged for each transaction.

Determine whether your local government will absorb the cost of providing the service or charge a service fee to the cardholder. (The law limits the amount of the service fee to the costs incurred in connection with the credit card charge.)
Use a competitive process to select a service provider. (The contract must be in compliance with your local government's procurement policies and procedures).
Explore whether any of the bidders are willing to reduce or waive their standard fees.

Accept Online Payments

Accepting payments through the municipal website or the website of a third-party vendor may result in increased collections of certain charges, such as payments of real property tax by those who live outside the area. The governing board may authorize payments to be made by credit card or electronic funds withdrawal through the municipal website. In addition, the governing board may enter into a contract with a third-party vendor to provide for payments to be made by credit card to the local government through the website of the third-party vendor.

The online option used by your local government must:

comply with Article 3 of New York State Technology Law and related regulations;
authenticate the identity of the sender and ensure the security of the information transmitted;
not be the sole method of payment; and
provide a confirmation page, which, at least, includes the transaction date, the amount paid, a unique confirmation number and a notice to the taxpayer to print out and retain the confirmation page as a receipt.

Enroll in the Electronic Value Transfer Program

To the extent permitted by law, your local government can accept credit card or other electronic payments using a New York State contract, such as the Electronic Value Transfer Contract (EVT). Pursuant to this contract, payments may be made on-site or over the Internet. Local governments currently use the EVT contract for collecting various types of payments including taxes, tuition, recreation fees, parking passes and utility payments.

Resources

New York State Office of General Services:

Government Finance Officers Association Recommended Practices:

Updated 2017