Checks are still one of the most widely used payment methods, and a modern lockbox provides a complete check processing service to support your business. With lockbox, check payments received and processed by your accounts receivable specialist today are instead sent by the payor directly to a P.O. box a bank sets up and maintains for you.
But, a lockbox is not just a mailbox or P.O. box. Every day, by a deadline of your choice, the bank will retrieve, digitize, process and deposit payments received. You are provided images, daily reporting and customized files that can then be integrated into your accounting platform.
A lockbox payment processing service can deliver a surprisingly high return on investment (ROI) for businesses of all sizes. This is because it streamlines the collection and processing of payments, reducing manual work, accelerating cash flow and improving overall efficiency. It can be offered standalone or as part of complete Treasury Management services offered by a bank. Understanding these advantages sets the stage for exploring the specific benefits that make lockbox services a smart choice.
What are the benefits of lockbox?
1. Reduced payment processing expenses.
2. Expenses scale up or down in step with receivables volume. If receivables are down, so are expenses.
3. Reduced float and days of sales outstanding (DSO). Checks are generally deposited quicker with lockbox services. Mail float is typically decreased when using a P.O. box versus items shipped directly to your physical address. The scale of lockbox operations allows specialized functions, bulk processing and deposits to be made quicker than businesses can achieve independently.
4. Eliminates staff time spent processing checks and frees up your accounts receivable resources to complete other tasks. Allows accounts receivable staff more working flexibility due to not being dependent on where and when paper payments are delivered.
5. Cloud-based access to remittance data, customized reporting options and integration with ERP software.
6. AI-based technology combined with a staff of experienced specialists means low error rates and excellent customer service.
7. Lockbox service can be customizable to fit your needs. Whether your receivables are wholesale low-volume and large amounts, or retail high-volume and small amounts, your business can be accommodated.
Is lockbox service right for your business?
Lockbox could be a powerful service to support your business, and the threshold of payment quantities that make this service a good fit for you varies by business. Contact your Treasury Management representative or Bankers Trust for more information, costs and ROI estimates.
