CSMFO Lockbox Survey- 5/16/13

CSMFO Lockbox Survey- 5/16/13

Agency / How long has your agency used a lockbox service? / Which vendor do you use? / Annual Cost / Annual Payments / Aside from the savings in staff time to process payments, what other cost savings have you realized? In addition, has using the service affected the efficiency of your overall payment process? / Have you encountered any difficulties using the service? / If applicable, please feel free to include any additional insight or information that you think might be useful.
City of Thousand Oaks / Not sure of exact date, but certainly prior to 1999. / Wells Fargo / $22,000 / 84,000 / No comparison to use. / Changes in their requirements (e.g., return envelope changes to accommodate their machines) can be difficult. / A couple of things to consider:
1. If you use a lockbox your mailing address will change for these payments. Some customers will set up home banking payments using this address. If you accept home banking payments electronically, you will need to get that new address into the ACH world or else you will likely have a lot of lockbox exceptions. Lockbox can only process the payments that include a stub. We have a bag sent to us daily with exceptions.
2. We are seeing payments going to lockbox decrease every year, with electronic payments going up. In 2008, we had 112,377 lockbox payments as opposed to 84,322 in 2012. Home banking seems to be the trend (and it's the cheapest to process). It's still worth it for us to have the lockbox, but I imagine that we may eventually come to a point where it's not.
City of Simi Valley / We have used lockbox services for approximately 7 years. / TransCentra / $26,000 / 160,000 / The City of Simi Valley was using a remittance processing machine to process the payments in house. Since the payments are processed by the lockbox vendor we no longer have to pay for the monthly maintenance costs to operate this machine. Additionally, the remittance processing machine had become outdated and a new machine would have had to be purchased if we didn't outsource the payment processing. / Occasionally, payments are coded to a wrong account. But these errors are few and far between. / N/A
City of Downey / Over 10 years / Bank of the
West / N/A / N/A / It increases the efficiency. / The download file sometimes does not agree with the credit amount. Sometimes the payments were posted to wrong accounts. / N/A
City of Ceres / July 2008 / Westamerica / $9,500 (0.25 per piece with stub, 0.45 per piece with no stub needs manual processing; base fee of $100.00 per month) / 35,000 / With the lockbox system, we do not have to do any research on payments. Posting as many as 300 payments at a time is quick and easy with an imported file. Balancing the daily revenues is much faster and we have a reduced number of deposits physically going to the bank. With the lock box system, the City receives its money much more quickly than processing the mail ourselves. / No, occasionally files are not created correctly so we have to request new ones be sent. / Determine the turnaround time on receiving deposits in the bank. Also find out if the process of sending your accounts and balances export to them is feasible with your existing billing software setup and how the import file will work with your receipts software.
City of Lodi / We looked at lockbox and chose to keep the service in-house. We process about 12,000 payments per month using a Remit Plus system from Jack Henry and Associates.