Managing Lockbox Relationships

By Mark Brousseau

Developing a strong working relationship with your lockbox provider is critical to the success of any payments outsourcing initiative, says Craig Bjork (cbjork@cds-global.com), director, account & business development, Data Capture Services, at CDS Global.

As a first step, Bjork recommends that billers make sure that their business rules are well documented and clearly understood by their lockbox provider. To be sure everyone is on the same page, ask the lockbox provider to share a copy with you. Review these business rules with your provider to understand why things are done a particular way, and what benefits they provide. If you hear, “I’m not sure,” or “We’ve always done things this way,” you’ve probably found a process that needs changing. “But don’t concern yourself too much with how the work gets done,” Bjork warns. “It is the results that you should worry about.”

Similarly, billers should make sure that their contract or service agreement is specific, and that they understand all of the billing points and how volumes are derived, Bjork explained.

In addition, whenever billers change their forms or remittance documents, they should give their lockbox provider an opportunity to adequately review and test them, Bjork said. “And listen to your lockbox provider’s comments and recommendations,” he said. “Documents that create issues in lockbox processing can also create exceptions and posting delays.”

Bjork noted that lockbox providers may want ‘perfect world’ scenarios, but this might not work for the biller. “Work with your lockbox provider to find the best solution for both parties,” Bjork said. “Everyone’s goal should be the same: timely and accurate processing.”

Bjork also recommends that billers visit their lockbox provider’s facility, to build personal relationships with the people servicing their accounts, and to see firsthand how their work will be processed. And know the chain of command for your provider. You also want to get at least two alternate contacts so you have options if your primary contact is unavailable.

Any strategies you would like to share? E-mail me at m_brousseau@msn.com.