How to streamline your payment processing to be easier, faster, more cost effective
Electronic lockbox services provide businesses with an efficient solution to processing payments. When payments are being received from varied sources and forms, processing, posting, and reporting these transactions requires significant internal resources. The more cost-effective solution is an electronic lockbox service.
What is a Lockbox Service?
Traditionally, organizations that received a lot of payments used a lockbox service to consolidate the many different types of payments they received. Customers could mail physical checks, send wire transfers, or deposits and the lockbox service processed each payment, created a report of each transaction, and sent a single deposit to the organization’s account.
This specialized service allowed businesses to receive payments securely, consistently, and faster than their in-house payment processing.
The same need still exists today.
What is an Electronic Lockbox?
Electronic lockbox services, or digital lockboxes, are the modern solution to the same problem. Today, organizations receive payments in a variety of ways. From electronic checks, ACH transfers, credit cards, debits, and many more, receivables are sent from multiple sources and in many different forms.
An electronic lockbox service collects a business’s electronic receivables and consolidates the payments to deliver one ACH deposit with a detailed electronic data report for every transaction and customer.
Just as traditional lockbox services made payment processing faster for businesses, electronic lockbox services multiply that result.
How Does an Electronic Lockbox Service Work?
An electronic lockbox service gives your business an efficient, secure, and flexible solution to your payment processing needs. Instead of using your internal resources to process payments to your business, you get a specialized service that is not only more cost effective, but faster.
Here’s how it works:
1. Customers send payment
Customers send your business their payment through any form: online bill pay, electronic payment, ACH, debit, eCheck, wire transfer, credit card, etc.
2. Payments are processed
The electronic lockbox service processes all the payments received. Any inaccurate payment information is reviewed and corrected while all other payments continue to be processed.
Because this is all done electronically, any inaccuracies can be corrected for the specific transaction at the time, while also correcting for future transactions so that future payments are processed even faster.
3. Payments are consolidated
No matter which kind of payment was received, all the processed payments are consolidated into a single digital report and ACH transfer into your business’s bank account.
Some electronic lockbox services like FirsTech’s, even process manual or paper payments and consolidate these payments into the electronic workflow.
4. Funds are deposited and a digital report is sent
Each day, you receive a single ACH deposit into the designated bank account along with a thorough digital report of every payment transaction. With FirsTech’s eLockbox, the reporting process can be streamlined even further and digital reports can be integrated directly into your CRM for immediate reporting and recall.
Why Should I Use an Electronic Lockbox Service?
A digital lockbox service speeds up the receiving, processing, and posting of receivables and consolidates all these steps into one streamlined service. Your organization benefits by saving time, resources, and money – all which make a significant difference in your bottom line.
Here are some of the benefits of using a digital lockbox service:
Cost-Effective
By using an electronic lockbox service, your company saves money. Instead of manually processing payments or using your team to process payments, you get all the benefits of having a specialized payment processing department at a fraction of the cost.
Additional features of a digital lockbox also add to your bottom line. Automated posting reduces manual staff tasks so that they can use their time more efficiently. You also receive low transaction costs which reduces your service expenses.
All these combine to create the most economical solution for your payment processing.
Simple
A digital lockbox service streamlines your payment processing into one simple and easy solution: one transaction, one report.
With an electronic lockbox service like FirsTech’s eLockbox, your reporting can be simplified further by integrating with your CRM, creating a single all-encompassing solution that makes your finances, reporting, and customer service easier. Each day, your CRM is updated so you can see a customer’s progression in real time, eliminating another step in your process.
Secure
As a specialized service, your electronic lockbox not only simplifies your payment processing, but makes it more secure. Your funds are secured and verified, leaving you less susceptible to financial risk.
In the case of any inaccuracies, those transactions are thoroughly reviewed and corrected before processing leaving correct payments to be processed without delay. Any information that was inaccurate is corrected for both the current transaction and for future transactions.
Fast
When using an electronic lockbox service, businesses typically receive payments 2-3 days faster compared to manual payments. This means you have faster access to your funds through a digital lockbox’s daily deposits.
Reporting is also done immediately so you have instant access to your transactional data, making it easier to recall information on customers or quickly create internal reports.
Your digital lockbox service is designed to streamline your payment processing for accelerated cash flow.
Detailed Reporting
Thorough reporting gives you quick access to the data you need to run your business efficiently. With an electronic lockbox service, you receive a report of your daily payments, customer transactions, remittance information, and settlement dollars each day.
All this data is thoroughly reported and consolidated into one digital report. You can then go into the report for a detailed history and record for each transaction to get as granular as your business needs.
With error-free posting, and digitized reports, and unique services like FirsTech’s Remote Image Archival System, you can rely on the most accurate reporting from your digital lockbox service.
Types of Lockbox Services
Traditional Lockbox Service
A traditional lockbox service still handles manual payments and checks. Some customers and industries prefer to use paper checks, and a traditional lockbox will process these and send a single ACH transfer to your business.
With more and more business being done online, solely physical lockbox services are not as common these days.
Digital Lockbox Service
A digital lockbox service is the electronic version of a traditional lockbox. A web address replaces a physical address to send checks to, and payments can be made through ACH, debit, credit, bank transfer, bill pay, or electronic checks.
The different payments are then consolidated and sent in one ACH deposit with a digital report.
Hybrid Electronic Lockbox Service
An electronic lockbox service like FirsTech’s eLockbox gives your business the most flexibility with a hybrid approach that is both a digital lockbox service AND a traditional lockbox banking service. All payments, regardless of format are processed and consolidated into one ACH deposit and digital report.
With this service, any customers who prefer to send payments via paper checks or manual payment are still able to do so. Physical payments are tracked in the image archival system and digitized in the reporting process so that you have the same detailed data access regardless of the type of payment.
With all payments, electronic or other, being consolidated and reported to you in a digital format, your internal reporting, CRM, and auditing process is easy and accurate.
By offering the most flexible payment options for your clients, you keep your customers happy and see consistent results.
How to Choose the Right Lockbox Service for You
Ultimately, you know your business’s needs better than anyone. Depending on which benefits of a digital lockbox service matter most to you, you can find a solution to fit your needs.
Consider the speed, reporting format, integration, and payment options available when making your decision and how these affect your current operations.
Solutions like FirsTech’s are designed to flawlessly integrate into your current operational system without disruption and simply provide you a more streamlined alternative to payment processing. Each feature exists to save you time, resources, and money so that you can make a positive difference in your bottom line.