Making the business case

Today, Feb 2003 by Haney, Chris

lockbox conversion

Council to Produce White Paper for

Lockbox Conversion

TAWPI'S CHECK COUNCIL HAS LOOKED CLOSELY AT JUSTIFYING A MOVE TO LOCKBOX CONVERSION-THE FINDINGS ARE AVAILABLE IN A NEW WHITE PAPER.

Have you thought about implementing lockbox check conversion but are having trouble getting your arms around the business case? You are not alone. In response to demand from TAWPI members who are evaluating lockbox check conversion, the Remittance Processing Check Conversion Council has produced a white paper discussing the business case for implementation.

The Council's Business Issues Work Group paper is a practical tool for formulating an organization's business case-with a special focus on operations issues. The devil is in the details, and the work group highlighted those details that can make or break the justification for lockbox check conversion. The paper is intended to be helpful even to those with little prior knowledge of Automated Clearing House rules or procedures. Included is a set of templates that can be customized to individual situations.

The heart of the paper contains projections of net benefits and costs from implementing lockbox check conversion, based on the specific variables, such as availability schedule for checks and processing volumes. The analysis incorporates the impact of the latest Federal Reserve and NACHA rules and highlights the operations and business impacts of rule changes or interpretations currently in process. The paper provides a section on risks, including operational, technical and legal risks, as well as the potential impact of industry developments such as "Check 21" (the former Check Truncation Act, also known as "The Check Conversion Act for the 21st Century"). There is also a section on operational issues and workarounds and a review of best practices from ARC pilots run to date. The paper includes a decision-evaluation matrix and a sample implementation checklist.

The Business Issues Work Group providing input to the paper includes representatives from billers, remittance processing operators, remittance processing software and hardware vendors and financial institutions. A number of members of the group are currently implementing check conversion projects, a successful pilot that is starting full-scale rollout. The shared goal of the group is to provide a clear and realistic map for organizations looking to realize the benefits of check conversion.

Chris Haney is founder of Politzer & Haney and a member of the Steering Committee of the TAWPI Remittance Processing Check Conversion Council. Additionally, he provides assistance to organizations evaluating or implementing check conversion. He can be reached at 617-795-0518.