Lockbox Banking
Candlefocus EditorWith lockbox banking, incoming payments, such as checks or credit cards, are sent to a post office lockbox – a secure, third-party location with a unique post office box. All payments are routed to the same address, which typically has multiple levels of security to prevent access by unauthorized personnel. The banking institution is the only entity with access to the post office box.
This system eliminates the need for the business to directly manage accounts receivable for its customers and helps streamline payment processing. Instead, payments are quickly received and deposited by the bank. As soon as the bank receives payment, it processes the document and deposits the money directly into the company's bank account. The bank then sends an electronic message advising the company of the deposit.
Ideally, this gives the company a quicker way to access its funds and reduces staff time, enabling the company to pursue other tasks and save on administrative costs and operating expenses.
Furthermore, the lockbox banking process enhances overall security. It eliminates any handling of physical documents by third parties, and integrates streamlined fraud prevention measures to reduce the risks associated with payments processing.
Lockbox banking also eliminates the possibility of lost or stolen payments. The lockbox is designed to provide secure, restricted access and help reduce mail processing time, with payment documents delivered more quickly to the bank for deposit.
By outsourcing accounts receivable, businesses can improve speed, accuracy, and security. Lockbox banking offers businesses a way to reduce the time and money spent on back-office payments processing, as well as to decrease errors associated with manual document handling.
By leveraging the many benefits of lockbox banking, businesses can improve their cash flow, save money, and create a more efficient method for managing their accounts receivable. Processing times are shorter, staff time and paperwork are reduced, and security measures effectively prevent fraud. Furthermore, businesses can gain access to more detailed and up-to-date payment data. This data can then be used to gain important insights into customer behavior, which can help create informed business strategies.