Lockbox Processing

The bank delivers to the business a list of electronic copies of the checks, information on the customer account and payment amount, and transfers the money to the business’ bank account. Businesses then use this information to record payments in their billing or financial management systems.

Ideal setups for bringing lockbox payments into Salesforce Billing vary based on the payment volume and the feasibility of your automation strategy.

Lockbox Workflow Overview

Consider using an integration platform to collect and process data files. You can also use Salesforce for loading payments. We recommend creating a custom “staging object” called Lockbox Payment, and then loading the payments you receive from the bank and lockbox process into your staging object. This way, you can monitor payments that have been matched to a corresponding Salesforce Billing record and any discrepancies or errors in this process.

Manually Recording Payments

If your customers remit only a small percentage of payments through lockbox processing, we recommend manually recording and applying payments in Salesforce Billing. You’ll annually create payment records along with their corresponding payment allocation records to allocate the payment to the correct invoices.

Automatically Record Payments

Business that receive the bulk of payments through lockbox processing should use the Salesforce platform to automate cash applications. Automating payment record creation and allocation can be a time-consuming process, with the level of effort compounded by the number of lockbox services in scope, and the integrity of the remittance info that customers provide.

Your solution should involve building a system to consume the information from the lockbox service provider and then record payments in Salesforce Billing. When using this approach, consider the number of banks currently providing lockbox services to your business. Since many banking institutions use different e-file formats, the level of effort to auto-create and allocate payments grows with each additional interface.

Considerations for Automatically Allocating Payments from Lockbox

After recording the payment in Salesforce Billing, you’ll need to apply that payment to the appropriate charge. Make sure to consider quality of customer remittance information when customers pay through the lockbox — payments can’t be accurately recorded and applied if remittance data and exception processes are incomplete. Here are some of the variables that you should evaluate.

• Does the receipt show which customer is paying?
• Does the receipt show which invoice or invoices are being paid?
• If the customer short-pays, how should the payment get allocated across several invoice lines?
• Does the bank take a fee per payment receipt, resulting in net cash received being lower than the invoice total?

Advanced AR Application

Determine whether payment allocations are in-scope for the automation effort. If they are, the Advanced AR Application package setting determines whether Salesforce Billing allocates payments at the invoice or invoice line record. This decision drives whether Salesforce Billing creates payment allocation (invoice) or payment allocation (invoice line) records to satisfy open balances.

Example

A utility company offers their customers the ability to pay by check. Every day, hundreds of customers send checks to pay for their utility bill. Let’s take a quick look at each step in this process.

1. The customers send their checks to a P.O. Box. The bank then retrieves checks from this location.
2. The bank records these payments and moves money from the customer’s bank account to the utility company’s bank account.
3. The bank sends a CSV file detailing the payment activity to one of the utility company’s servers.
4. The utility company uses a custom automated solution to ingest the file and process it according to the bank’s CSV format.
5. For each record, the utility company creates a payment record and one or more payment allocation records. Salesforce Billing allocates these records to the invoice or invoice line based on the package’s Advanced AR Application setting.
6. Records in the CSV file that don’t have complete payment information are flagged for manual processing.