Winning the War on Misapplied Payments
Lockbox errors can cost you time and money
Errors caused by your in-house process or your lockbox can cost you time, money and customer service time.
Over the last several years, the payment industry has seen an increase in the number of errors per 100,000 payments processed.
Of all the possible lockbox errors, misapplied payment posting errors are not only the most common but also the one with the highest growth rate.
The Consequences of Misapplied Payments
Misapplied payments can cause a potential disconnection of service when the customers themselves don’t catch the errors in time. This situation generates irate calls to customer service, consuming staff time and resources. As you can see, misapplied payments can cost you money AND ding your customer satisfaction levels at the same time.
There is a key to avoid misapplied payment errors
In order to avoid misapplied errors you need to have controls or review processes that give you the ability to review suspect transactions before the final posting. Does your software or your lockbox provider’s software allow you to review suspicious transactions? Do you or your lockbox provider have adequate controls in place to catch misapplied errors before the final posting?
A simple, elegant and extremely efficient solution
The best solution I have seen for misapplied payments are payment thresholds. This solution starts with the ability to establish over and/or under payment amount thresholds. Then the system places all payments exceeding the thresholds in a Suspect Items queue or report. Before the final posting, you review the suspect queue for accuracy, avoiding errors. A simple, elegant and extremely efficient solution for a serious problem.