Check Room

One of my first formative projects was the Check Room. The goal was simple, improve the cycle time for the production of interest payments from bonds investments. We used a system called Bond Master that managed the individual positions and calculated the necessary interest using the bond’s terms and conditions. Daily we would generate interest and principal payments based on transactions that process, such as a call or regular interest payments. I’ll talk about interest and principal in a Common Sense Finance article later. For now just understand that we printed and mailed checks daily. At first the print job was all manual and the printer printed directly on check stock. We managed our check stock using a ledger with each check number being assigned to the print job so the print matched the stock. Of course there would be errors and check stock would be destroyed and the job would get synchronized all over again.

Once the print job finished those checks would run through a device that would separate the individual checks and stuff them into blank envelops so that the name and address fit clearly inside the clear window of the envelop. Yes, you guessed it, the stuffing equipment would also jam up and cause specific checks to be destroyed. Each destroyed check would then again get reprinted and the cycle continued until all the checks were printed. After a successful print run the stuffing machine also added the postage and checks were dropped off in the mail.

By 1989 MICR enabled laser printers began to hit the scene but we didn’t adopt these printers until mid/late 90s. With MICR enabled laser printer we could skip the stuffing machine by printing directly on z fold check stock paper. The paper had all the necessary anti forgery features but instead of stuffing into an envelop, we used a folding machine to fold the page into a Z and press the glue lines to turn the page into its own envelop.

My job was to design the entire flow. First I modified the check printing template to create a CSV file output. From there I was able to grab the file and process the CSV using an import routine to create a document file that I could just submit to the printers. Given the size of our operation we needed many printers and the file required to be broken apart in equal parts to submit jobs to any one of the printers. One problem reared its head early in the design cycle which became a huge problem. Since the checks are printed on single pages of paper there was no good way to know that any given check actually printed. To solve the problem we needed to know where a single check was at any given time.

I solved the problem by installing a bar code reader on the Z fold machine. As a check was folded the bar code reader scanned the check number and stored it in a file. I was able to build software that processed those files against the given print run and any checks that didn’t match were subject to a search. We also needed to labels to the bins themselves indicating the starting check numbers for each batch. Often we needed to pull checks for various reasons before the payments were released.

After the Z fold we used another machine to apply the postage but this time we learned that using bulk postage reduced our mailing costs. The bulk postage works by having each mailing be exactly the same so that postage can be calculated by weighing the batch. We hired a company to deliver the checks to the post office before the cut off time. Occasionally we would miss the deadline for the courier and I was the guy who would deliver the checks to the post office. Not my idea of the good time though.

Looking back at the project, it was successful because I had ultimate authority to decide how the operation flowed and the people building the solution were the same people using it. Each design iteration was directly measurable for positive/negative feedback. I also used regular times of the day to regroup with team mates and debrief on the days operations and incorporated that feedback into our development cycle. The resulting stability of check production eliminated waste in terms of paper stock and envelopes, reduced mailing costs and easy enough to hand over to other people to run.