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Collection Model

The Phoenix-Hecht Postal Survey™ is an objective, carefully monitored, statistically validated measurement of remittance processing performance. Produced since 1968, the survey is carefully designed to measure and accurately report total float in the same manner that a remittance processing customer would experience it. All significant remittance processors are measured in the survey and make their performance results available to customers and prospects. You can request performance results for specific processors.

The Phoenix-Hecht Postal Survey™ is more than just a mail time measurement. The Survey:

• Charts the journey a mailed check takes on its way to becoming good funds, which is what you really want to know in order to maximize the use of these funds.
• Measures actual changes in lockbox mail whether these changes result from revised mail delivery standards, transportation delays, mail sorting equipment problems, or a remittance processor's operational characteristics.
• Reports current processing performance and trends.
• Incorporates and links individual lockbox characteristics such as mail pickups, mail arrival patterns, and check clearing deadlines in its float calculations accounting for differences in total float times from one lockbox to another.

The Postal Survey™ is conducted in April and October and published in July and January. During the ten business days of each survey, envelopes are mailed to all participating processing sites from major population and business centers, large U.S. Postal Service processing and distribution facilities, and selected cities in each state (170 originating points in total). Receiving sites consist of all of the major remittance processors. The survey envelopes are mailed in a fashion which reflects how corporations handle outgoing mail.

Phoenix-Hecht codes each envelope to identify its mailing location, mail origination date and receiving remittance processor. (This process insures that each envelope can be accounted for and tracked during the survey.) Once prepared, the envelopes are seeded into the mail stream to be processed and transported to their destination by the U.S. Postal Service. At each receiving destination, a remittance processor picks up the envelopes from the Postal Service and affixes a date and time stamp. Phoenix-Hecht uses these date and time stamps to calculate mail arrival patterns for each remittance processor. Strict quality controls are in place to ensure the proper reporting for each envelope. Each processor's current availability schedule is then integrated with the mail arrival patterns observed in their lockbox to compute total float.

A corporate customer should make all comparisons between different remittance processing sites based on total float which is the sum of mail and availability times. Only the measurement of total float can properly represent the float characteristics of a remittance processor. Phoenix-Hecht Postal Survey™ times are calculated using statistical techniques designed to depict trends, simulate the corporate lockbox experience and remove aberrations that might occur during an individual survey. The cost to move a lockbox can be a significant expense and should only be undertaken if there is a certain and sustainable float advantage.

The Postal Survey™ Report breaks out mail and availability float, the two components of total float. The term mail time can sometimes be misleading. While mail times are measured in elapsed hours they are reported in whole days. The whole day measurement reflects the calendar days from day of mailing to banking day of ledger credit. The whole day measurement is consistent with what corporations observe as mail time: the number of calendar days between the mailing date and the day the deposit is reflected on their bank statement.

Postal Survey™ availability is a statistical measurement of expected availability based on the lockbox processor's published availability schedule and unique mail arrival pattern. To calculate an availability number, it is necessary to assume that checks are drawn on banks local to the sending zip code. This assumption does not apply if the Postal Survey™ data is being used by the Collection Model™ and the analysis includes the use of individual remittance's routing transit number (RTNs). Phoenix-Hecht integrates a processor's availability schedule with its mail arrival pattern to determine which items are received in time to make deposit times and availability deadlines.

Neither mail nor availability float alone is sufficient for comparing performance between remittance processors. Total float, representing the number of calendar days between the mailing date and the date funds are made available, measures remittance float as the corporate cash manager sees it. Only the Phoenix-Hecht Postal Survey™ combines actual measured mail time and bank availability for a true picture of lockbox performance. Ask your remittance processor for a copy of their Phoenix-Hecht Postal Survey™ results.

Any decision to change a remittance location or provider should incorporate Postal Survey™ data in conjunction with a Collection Model™ analysis to best replicate the uniqueness of your company's customer base.