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.

Taking Some of the Pain Out of Lockbox Conversions

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.

Non-Profits Up The Ante

By Mark Brousseau

Go to any conference of charitable organizations, and the conversation will almost inevitably turn to fundraising, and how to effectively steward donors so they’ll be more likely to donate more frequently, and in larger amounts. The solution, many non-profits are discovering, is to better leverage their back-office – or their caging or cashiering operation, as many non-profits call it – to capture more timely, higher-quality information from incoming donations. Non-profits can then use this information to better target and personalize their appeals.

And this is good news for some lockbox providers, says Lesa Brooks, general manager, Data Capture Services, West Region, for CDS Global (lbrooks@cdsfulfillment.com). This evolution of traditional donations processing (open mail, deposit check, send supplemental remittance documents on to someone else for handling …) plays right into the industry’s integration of advanced data capture and recognition (think: medical payments/EOBs).

“Non-profits are asking for image and data capture of any document that may be sent to a lockbox. This obviously includes the check, but also appeals, special requests, membership forms, magazine subscriptions, correspondence, directions for how the donation should be used, and more” Brooks told me. “With this information, non-profits hope to accelerate donations posting, eliminate keying of donor information, and feed their analysis and donor management systems. They also want to speed the generation and personalization of their ‘thank you’ letters, which are key to convincing people to donate to the non-profit again.”

Brooks warns that this version of donations processing is not for everyone: “It is specialty processing – certainly not vanilla – and most non-profits require and demand very personal attention.” It’s for these reasons that many bank lockbox providers are not overly excited about processing donations. “The sheer number of forms scares many banks off,” she said.

But Brooks sees that as an opportunity for her company, and others like it.