The Phoenix-Hecht Postal Survey is an objective, carefully monitored, statistically validated measurement of total float in a remittance collection system. Total float, which is the sum of mail and availability, provides the best measurement of a service providers remittance collection performance. Postal Survey results are calculated using statistical techniques designed to simulate the corporate lockbox experience, remove aberrations that might occur during an individual survey, and depict trends. The trend validation is important to corporations who make lockbox site decisions based upon a consistent pattern of performance.
The Postal Survey is conducted in April and October and published in July and January respectively. During the ten business days of each survey, envelopes are mailed to all participating lockbox sites from mailing locations which include all major population and business centers and U.S. Postal Service Sectional Center Facilities. The envelopes, which are uniquely coded to identify the mailing location, date and destination, are mailed in time to make the last mail pickup of the day by the citys main Post Office. These end of the business day mailings simulate corporate mailing practices.
The U.S. Postal Service handles and transports the survey envelopes. After pickup at their receiving destination, envelopes are taken to the service providers lockbox processing area, where they are time and date stamped by lockbox personnel. Mail times are measured in whole days. The whole day measurement shows the calendar days from day of mailing to banking day of ledger credit. The whole day measurement starts when the item is mailed. The whole day measurement is consistent with what corporations observe as mail time: the number of calendar days between the mailing date and the ledger day of deposit. Arrival patterns are used to determine the impact of mail arrival on the providers availability schedule.
Postal Survey availability, the second component of total float, is a statistical measurement of expected availability, based on the service providers published availability schedule and its mail arrival pattern and deposit times. A service providers availability schedule is integrated with its mail arrival pattern and deposit times to determine which items are received in time to make the availability deadlines. Checks are assumed to be drawn on banks local to the sending zip code, and weights are assigned to routing transit numbers based upon observed remittance sample data. The expected availability for a sending zip/receiving site pair is calculated by weighting individual local routing numbers and multiplying the published availability for these points by the probability of mail being received in the lockbox during the period that the availability is in effect.
Neither mail nor availability float alone is sufficient for comparing lockbox performance between providers. Total float, representing the number of calendar days between the mailing date and the date funds are made available, measures lockbox float as the corporate cash manager sees it.
Postal Survey Reports provide vital information that enhances the performance measurement of your lockbox. The Postal Survey, an independent third-party measurement of lockbox performance, is recognized as the industry standard by corporations.
Postal Survey mail and availability float calculations are designed to reflect the corporate lockbox collection experience. The data incorporates smoothing and weighting procedures which remove aberrations and confirm trends. Float is measured on a calendar day basis. In order to understand how mail and availability float are calculated, it is important to keep the following four points in mind:
These assumptions only apply to Postal Survey reports. Companies needing a more accurate depiction of total float in their system should request output from the Collection Model.
The Postal Surveys total float measurement provides the best picture of a corporations lockbox collection float experience. Alone, neither mail float nor availability float is sufficient for comparing lockbox performance between sites. Total float, representing the number of calendar days between the mailing date and the date funds are made available, is the only valid basis for comparison.
Because elapsed days of mail are calculated with respect to the individual receiving processors end of ledger day, you cannot determine elapsed days by dividing the elapsed hours figure by 24. Elapsed days of mail are calculated from the time of mailing until the business day of deposit.
The business day of deposit can be determined by using the date and time of receipt of an envelope and by applying the processing assumptions of a minimum of four hours processing and a maximum of three daily deposits. Each participant in the survey specifies the latest mail pickup which is processed for same day. A deposit is generated four hours after this pickup to establish end-of-day. Two other availability schedule deadline times, which offer the corporate customer maximum benefit, constitute the remaining daily deposit times. The time and date of receipt dictates the next available deposit time, allowing for the minimum four hour processing assumption. For items deposited during the weekend, the business day of deposit is Monday.
An availability schedule states the availability granted for an item drawn on a particular endpoint that is received by a particular time. Since the lockbox customer has no control over the deposit times for items received and processed, the availability schedule alone is inadequate for modeling purposes. The statistical measurement necessary for modeling requires that an availability schedule be used in conjunction with the distribution of lockbox items, known as the deposit pattern. This measurement is called "expected availability".
Deposit patterns indicate how much mail can be processed and deposited by each availability deadline using the processing assumptions of the survey. A deposit pattern is computed from the time- and date-stamps provided on a participants Postal Survey envelopes. Phoenix-Hecht computes a non-local and a local deposit pattern for each participant. A local deposit pattern is computed because the Post Office tends to sort local mail at a different time than other mail. The local deposit pattern uses the six or seven sending zip code geographically closest to a receiving location.
Postal Survey Availability is the average expected availability for items mailed from the sending zip and deposited in the lockbox bank. The availability is a weighted average of the receiving sites availability for the four and eight-digit routing transit numbers which are local to the sending zip.
A more accurate calculation of a companys expected availability can be obtained by using an actual sample of the companys remittances and The Collection Model.
When an item is received after the end of the banking day Friday, the weekend days are included as mail time because the item will be given ledger credit on Monday. An item will be granted availability based on any weekend deadline it meets.