Guest Post by Craig Lee Huntington
When we decided to post an article about Lockbox, the first person we talked to was Craig Lee Huntington because, well, there’s practically nothing about lockboxes that he doesn’t know. Please enjoy this blog post that gives you an experts view on this time saving accounts receivable automation tool:
Lockbox Is a Fundamental Part of the Community Management Industry Today
Many cannot imagine a world before lockbox, and most management companies use lockbox because of significant time-savings and increased security added to accounts receivable automation.
With the widespread use of lockbox, one is lead to ask if all lockbox programs are the same. Today, they are not. Many banks have invested in new technologies and developed specialized and well-trained HOA processing teams. Community management lockbox programs can be significantly more challenging than the standard retail lockbox that a local community bank is accustomed to. For this reason, there is significant value to working with a bank that specializes in community association payment processing. Often times these banks have invested in technology, equipment and personnel that provide significant advantages to the community management company and their associations.
Think Outside of the Lockbox: Accounts Receivable Automation
When comparing lockbox programs, it is important to think outside of the lockbox and consider the following items to increase accuracy and ensure the maximum time-savings for your company.
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- Validation File:
The validation file that includes the name, account number, unit address and secondary address for each homeowner is at the heart of a good lockbox system. If you are not automatically or regularly sending a validation file to your bank, you may not be receiving optimum lockbox service. This file allows the lockbox team to accurately post payments that are not accompanied with a coupon. It also reduces research requests that are sent to the management company office. With a validation file, your lockbox program should reject less than one out of a thousand payments as a research item. - Software Integration:
It is important that a community management company use industry-specific software, such as Enumerate, that is not only capable of importing a lockbox file for multiple communities, but also capable of automatically exporting a validation file using an automated scheduler. Industry-specific software packages include the highest level of integration and reliability. They also provide efficiencies outside of lockbox such as automatic account reconciliation. - Remote Scan to Lockbox:
Banks committed to the HOA industry have also developed a “Scan to Lockbox” option that allows a company to scan payments received outside of the lockbox facility at the association or management company office directly into a lockbox system, eliminating the need to sort or hand-post payments. - Homeowner Bill Payment:
Many homeowners today use their banks online bill payment system to pay their bills, including their association assessment. Industry trends show a continued increase and adoption of online bill pay programs so it is important your bank has a working relationship with bill pay providers.
- Validation File:
When assessing your current lockbox program, it is important to consider these items and the knowledge and technology of the banking team supporting your company. Changing banks will take time and effort, but a good bank will help you through this process and provide long-term benefits.
Craig Lee Huntington is the Operations Manager at Alliance Association Financial Services. To learn more about community association lockbox and the technology behind a lockbox program, he can be contacted at clhuntington@aafin.com.
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