by Julie A. Phillips, General Director – Revenue Accounting & Analysis, Union Pacific Railroad
Union Pacific Corporation is one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, is North America’s premier railroad franchise, covering 23 states across the western two-thirds of the United States. With 25,000 customers, including steamship lines, vehicle manufacturers, agricultural companies, utilities, intermodal companies and chemical manufacturers, Union Pacific processes a very large volume of cheques each year. Historically, the company had outsourced its cheque processing and imaging to its bank, but with nearly two million keystrokes per month, this was costly. In addition, Union Pacific had a vast array of different remittance formats, resulting in issues with accuracy and timeliness of cheque processing.
The company is constantly seeking opportunities to enhance process efficiency, and reliability, and reduce costs. Automating and optimising cheque processing offered an ideal way to achieve these objectives, with a substantial return on investment (ROI).
Evaluation and decision
Initially, the team approached a variety of third-party cheque processing companies but found that they did not meet their needs for a variety of reasons. In some cases, they did not meet the full diversity of their remittance data requirements, some provided a broader solution with a range of associated functionality that they did not require, while others did not enable the solution to be tailored sufficiently to their needs. Consequently, the team researched what would be required to build an in-house solution, and the degree to which this could be tailored to meet Union Pacific’s specific requirements. As a result of this evaluation, Accounting made the decision to bring cheque processing and imaging in-house.
The Accounting and IT teams then worked together to acquire a specialist software tool that they could adapt to their own needs. Unlike other large companies, Union Pacific has maintained its IT department in-house, which provided the programming, implementation and maintenance for the new application. This included developing more than 2,400 templates for remittance data to cover the large number of exceptions that the firm processes. In the future, this number is likely to increase significantly. A process of constant feedback and refinement has ensured that the technical delivery has been in line with the business requirements and template specifications.