With the use of checks continuing to slowly decline each year, businesses are faced with a challenge of how to effectively handle those items as part of their accounts receivable strategy. There are many alternatives businesses can choose from today – Remote Deposit, Electronic Check Conversion at point of sale and back office, and Lockbox.
A lockbox is a bank maintained processing service dedicated to expediting collections by receiving and processing remittances for a host company in a convenient and efficient manner. Customers’ remittances are mailed to your company’s attention using a post office box maintained by the bank. The lockbox department will receive mail, open envelopes, examine checks for correct payer and dollar amount, endorse checks, facilitate deposits, and process remittance information.
The Benefits of a Lockbox:
Improve your cash flow by getting deposits into your account sooner by reducing mail and processing float.
Reduces internal receivables processing costs, potential for data entry errors, and time posting receivables to your accounting system.
Ability to receive payment data and images online in order to support customer service inquiries and facilitate decisions regarding the shipment of additional goods to your customers.
Improves security of payment handling by separating invoicing and receiving.
Online portal providing same-day detailed receivable and deposit information, as well as online image access to view checks, remittance information, envelope and other scanned documentation. All images are available by the end of the processing day.
Each business needs to evaluate the most cost-effective, efficient way to manage their receivables taking into account geographic distribution of customers, typical payment amount, and level of remittance information needed to up accounts receivable systems. Banks and lockbox service providers can typically provide a cost/benefit analysis of the best options for your business.