By Mark Brousseau
To be sure, transitioning to a lockbox provider from an in-house payments processing environment can be a stressful process with lots of hurdles along the way. But taking time early on in the process to evaluate your legacy systems and true business requirements can keep your conversion from getting tripped up, says Craig Bjork (cbjork@cds-global.com), director, account and business development, Data Capture Services, for CDS Global, a subsidiary of The Hearst Corporation. Bjork provided me with the following tips for corporate billers looking to streamline the conversion to a lockbox provider:
… Evaluate your billing systems capabilities. “A good lockbox provider will want to limit the number of exceptions clients receive by working through all of the transactions a client’s billing system can handle,” Bjork said. “This goes beyond payments to things like change of address requests and requests for information. Knowing what your billing system can handle means you can offload this work to the lockbox provider, freeing your internal staff.”
… Clearly define business rules and expectations, early on. “Moving to a lockbox provider is a good time to evaluate business processes and the value they provide,” Bjork said.
… Don’t get too hung up on the mechanics of how your lockbox provider will process your work (the models of machines, version of software, etc.). The corporate biller’s primary concern should be whether the work is getting done correctly and on time, Bjork explains. In this vein, also be sure to regularly monitor the work being done on your behalf: ask for measurements and appropriate reports (be sure to read them!), and make periodic visits.
… Outline critical times for file and information delivery. But make sure that these times correspond to key deadlines, such as billing cut-offs or customer service postings. Don’t set delivery times solely based on convenience or the way things have been done in the past.
… Assign one individual on your transition team to handle communications and deliverables handoffs. While your transition team should include a cross-section of project stakeholders, having a single point of contact helps ensure timely and accurate project status updates.
… Trust your selected service provider, and let go. “This is why it’s so important that you choose a lockbox provider that is as concerned about your customers as you are,” he said.
Any strategies that your organization found useful? E-mail me at m_brousseau@msn.com.
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When an internal processor outsources for the first time, ensuring reduced exceptions is key as noted by the author. One important step – often overlooked – is to interview in detail each internal staffmember who processes payments to understand the full details of the current exception payments. Staffmembers know each of the “problem payers” – those who don’t provide enough info or provide bad info, etc – and these staff know how to efficiently convert what they get into what is needed for proper A/R posting. In our reviews, we see staffmembers in every engagement who have “post-it” notes, cribsheets, and other documented tricks and clues around their desk and in their head – things that your new outsourcer must know to be effective.
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