According to NACHA, it costs $1.22 on average process a paper check, which accounts for manpower and various other costs. Even banks who specialize in HOA and COA processing report that best-in-class lockbox centers experience an average of $0.65 to $0.75 per processed check. Property management companies may not realize that they are paying lockbox bank fees, but in reality, they are.
Typically, banks will offer the following two types of “freeaccounts:
- Free Checking Accounts: The bank is using the earning power of your money to pay for the lockbox processing. Free accounts don’t illustrate how your earnings offset their fees.
- Analyzed Accounts: The bank is using the earning power of your money to pay for the lockbox processing fees. However, the bank will give you a statement detailing how your earnings offset their fees.
Beyond checking processing, there are internal banking tasks that can increase your lockbox costs. These include:
- Managing exceptions (i.e. processing checks without coupons)
- Correcting lockbox payments that were applied incorrectly
- Printing coupons
- Handling inbound calls
- Managing clients who forget to pay
A digital payment tool offered through a platform like FRONTSTEPS solves the issues associated with accepting paper checks and allows property management companies to put their earning credits to better use. To learn more, download our free guide, What Every Property Management Company Needs to Know About Free Checking.