Modernizing Mail-In Payments: How FNBO Lockbox Helped a Municipal Utility Company Streamline Operations

Author: Chris Kestel, Public Entity Relationship Manager, Commercial Banking

What do you do when your business technology is nearing the end of its lifecycle, and slow payments processes are beginning to take a toll across the organization? For one large municipal utility company, the answer was clear. You turn to FNBO to streamline accounts receivables.

FNBO’s Lockbox service provides businesses with a secure, efficient way to process cash and check payments by having customers send them to a bank-monitored post office box. Payments are scanned and deposited by the bank the day they arrive, and businesses can view check images and related documents online.

One municipal electric company shared how FNBO’s lockbox solution transformed an outdated, manual payments process into a streamlined and highly accurate system.

A Large Municipal Utility Company Seeks a New Payments Solution

FNBO recently set up its Lockbox Solution for a municipal utility company. The organization typically processes over 276,000 transactions a month, primarily checks from customers, totaling an average of more than $80 million. Prior to the change to FNBO’s Lockbox, the utility company handled remittances internally, using an outdated machine and process.

Teams were required to perform a number of tasks manually, resulting in multiple inefficiencies. For example, it was impossible to run multiple types of payments simultaneously or to efficiently handle exceptions. Given the high volume of check payments received each month by mail, the manual processing slowed the payments lifecycle and put cash flow at risk.

As the company began to explore Lockbox solutions, the comfort of their customers was top of mind. It was critical to work with a company that operated a local Lockbox facility, so they first spoke with a nearby financial institution. After learning more about the company and its solution, it became clear that it would not have the capacity to handle the utility company’s payments volume.

Being familiar with FNBO as their bank, the utility company began looking into our Lockbox service. They toured our state-of-the-art facility and were immediately impressed with the machinery available to sort and handle mail, and particularly the multiple levels of security and quality checks in place to ensure the safety of payments processed. The expertise of our staff and the well-designed practices for handling payments were other obvious benefits.

Realizing Results from FNBO Lockbox

Prior to moving payments to FNBO’s Lockbox solution, the utility company was reliant on data entry to key in payment amounts and reconcile payments submitted. Due to the manual nature of this process, error rates were higher than acceptable, resulting in lengthy reconciliation time as staff poured through thousands of payment stubs to find data entry errors.

FNBO’s Lockbox solution offers a faster, more secure and cost-effective way to process check payments, reducing administrative costs while improving cash flow and efficiency. Outsourcing check handling to a trusted provider minimizes risks and ensures timely access to funds, making it a valuable tool for managing check payments.

The utility company realized multiple advantages by outsourcing its mail-in payment process to FNBO’s Lockbox solution, including reduced internal workload. Internal efficiency was also enhanced. The company noted that with the reduction in manual processes, error rates are now few and far between, drastically accelerating the speed of payment processing and reconciliation.

FNBO provides additional support in a surprising area. It isn’t uncommon for customers to note critical information on a stub sent with their payment, such as a billing address change. In many Lockbox facilities, these messages would be lost, but FNBO has the capability to sort these messages and supply them to the company for review.

FNBO’s exceptional customer care is another area where the utility company delivers high praise. One team member recognized the responsiveness and proactivity of FNBO teams as well as the consistent level of service.

“There are never any delays for our customers,” she said. “Which is really important. If posting of payments is delayed, customers could be subject to disconnection or late fees. We never experience that with FNBO.”

Overall, the municipal utility company loves the hometown feel of working with a Nebraska bank and FNBO in particular.

“If I need to handle transactions electronically, FNBO delivers, but if I need to get a person on the phone, they’re always available to respond,” said the utility company’s supervisor of customer account services.

To learn more about FNBO’s Lockbox services, visit our website.

About the Author

As a Relationship Manager serving the Public Sector for Commercial Banking, Chris works with communities across Eastern Nebraska, Kansas and Texas areas including the cities of Omaha, Lincoln, Fremont, Kansas City and North Dallas. Taking a wholistic approach, he helps clients with business banking and treasury functions, guiding day-to-day operations and identifying solutions to help meet both short- and long-term goals for entities within the public sector.