Pricing
December 11, 2008 – 7:03 amExcept for imaging, all of the collection products discussed in this chapter are very mature, with competitive pricing by financial institutions. (For comparative prices of these and other cash management services, see the Executive Summary of the Blue Book of Bank Prices on the Phoenix-Hecht Web site, www.phoenixhecht.com.)
In evaluating listed prices, it is important to note that prices are unbundled, that is, each component of a service is separately itemized on the bank’s invoice or account analysis. For example, the Blue Book separately prices the wholesale lockbox processing charge (currently averaging 43 cents) and the check copy charge (currently 11 cents). Each service can have as many as six to eight separate components, including fixed charges not based on the number of items processed. The current Blue Book monthly wholesale lockbox fixed charge is $110, to which would normally be added various other unit charges based on activity volume.
Banks discount pricing based almost entirely on volume, with 20,000 or more items a month usually required for a reduction of their charges. That said, it is generally inadvisable to focus entirely on the cost of a service. Any service or quality problems will cost far more to resolve than the few cents of savings that may be attained through hard negotiation. Furthermore, the trend toward the consolidation of bank relationships (discussed in Chapter 9) will force companies to award their cash management business to one or a few banks, reducing the possibility of extensive price comparisons.
Taken From : Essentials of Managing Corporate Cash
