Homeowners mail their assessment payments to our PO Box, which is cleared daily. Checks are scanned, and available for viewing for up to 24 months. The data from the checks received is combined with the payment coupon or invoice stub, and is used to create a payment file that is sent electronically to the Association’s accounting service, in their “software language”, so that this data can update the payment records of the respective homeowners, on a daily basis. We can also collect on the Association’s behalf, monthly automatic payments from homeowners’ checking accounts at other banks.
With no fee lockbox services, interest bearing lockbox checking accounts, improved cash flow, quicker access to funds, this is the ideal product for Associations.
Q. What is the “lockbox”, and how does it work?
A. Lockbox is the generic term used to describe the processing of homeowner payments. It starts with a Post Office Box, which Bay Commercial Bank rents from the U.S. Postal Service (at no cost to the Association), for homeowners to mail their payment checks and coupons. Daily, the mail is collected and processed. The Association’s account is credited with payments received, and an electronic data file is sent to the Association’s accounting service, compatible with their accounting software, detailing the payment activity. The data file can then be imported into the Associations records, to register the payments received.
Q. How do we obtain coupons, and who pays for them?
A. While Bay Commercial Bank will usually arrange for the printing of your coupons, an Association is free to choose its own vendor, once we can pre-test the coupons for the requisite printing specifications such as paper size, thickness, font type and size, location, etc. Our current cost to an Association is $3.50 per coupon book, which covers both the cost and sales tax for annual bulk orders.
Q. What about coupon books required for “resales” during the year.A. For orders of single books, the cost and tax amounts to $7.50 per book.
A. Yes, as long as the statement has a tear-off portion at the bottom with an encoded OCR-A scan line which meets our specifications, it can take the place of a coupon.
Q. What if a homeowner disputes the amount of their payment? A. One of the advantages with Bay Commercial Bank’s automated lockbox system is that the Association’s accounting service has access to view the images of all checks deposited, for up to 24 months. Images are stored by the Bank for a period of seven years.
Q. Can payments be processed without an accompanying coupon?A. In most cases, yes. If the homeowner includes the full name of the association and their account number on the face of the check, then with that information the payment can be processed. If there is not enough information available, every effort will be made to contact the Association’s accounting service for assistance.
A. We cannot determine how a payment should be applied, that is done by the Association’s accounting service. We only report the account number and the payment information.
A. The payment is processed for the amount appearing on the check. If the Association’s accounting service does not want us to process irregular payments, we can return them to the accounting service for manual processing.
A. We can only use a coupon to deposit into one bank account. If you want payments to go to another Bay Commercial Bank account, they would have to be accompanied by a different coupon in order to identify them as special assessment payments.
A. Yes, if the properties are all in the same Association and the coupon for each property is enclosed along with the payment.
Q. Can you accept multiple checks for a single property? A. We can certainly accept checks from multiple owners of a single property, all at the same time, along with the coupon.
A. Those payments are not actually electronically transferred. When a homeowner pays through their on-line banking service, a physical check is generated and mailed to the lockbox. When we receive it, it is processed just like any payment not accompanied by a coupon. Homeowners who pay this way are encouraged to consider auto-pay instead, as it is quicker and easier to process, and there is no charge for the service.
A. On a simple form, the property owner provides us with information related to their bank account, and property identification, and we process the transfer of their payment(s) on the 10th of every month (or next banking day), from their checking account to the Association’s account with Bay Commercial Bank. This eliminates owners having to remember to mail payments, saves postage, eliminates the possibility of late payments, saves the cost of coupon books to the Association, and there is no charge for this service.
Q. What happens if a payment check or an auto-pay “bounces?”A. The amount of the payment is deducted from the association's bank account, along with a $5.00 fee. The Association’s accounting service is notified of the returned item.
Q. Can you automatically redeposit a returned check? A. The Association has the option to choose either immediate chargeback (this may act as an early warning of a financially distressed owner) or representing the item once more.
A. Any correspondence included with payments is forwarded to the Association’s Accounting service on a best-effort basis. Since payments are machine read, some may be inadvertently overlooked, and therefore homeowners should be advised to send all correspondence and change-of-address notifications to the Accounting service.
Q. Can we use the same coupons if we change our Banking relationship to Bay Commercial Bank? A. Unfortunately no, since the OCR scan line on a coupon is unique to the lockbox data for an Association banking with Bay Commercial Bank.
Q. We are currently utilizing your excellent lockbox service, but plan on changing to a different Accounting service provider - can we still use the same coupons? A. Certainly, as long as the new service provider uses the same property identification numbers.
Q. Can we use the lockbox service for any other purposes? A. The lockbox service can certainly be used to supplement other accounting tasks. For example, units can be set-up within the lockbox, with their own coupon books, to separate non assessment income, such as the sale or replacement of keys, transponders, etc., laundry room, rentals such as clubhouse use, or space to telecommunication companies for dishes and antennae.
Q. When can we expect to receive our monthly bank statements, so that our Accounting service can prepare the financial reports needed for our monthly board meeting? A. Bank statements are available on-line to your Accounting service provider on the first day after the month-end. We also provide a special no fee service called e-vue to designated board members, which also gives them access to account information.
