7 Benefits of Using Lockbox for Your Business
December 4, 2023 | Workforce Boosts, Tort, Regulatory, Tax Reforms Top 2023 Accomplishments
Although electronic payments have been gaining popularity, paper payments are not going away anytime soon. Checks are still one of the most widely used payment methods.
A lockbox payment processing service can deliver a surprisingly high return on investment (ROI) for businesses of all sizes. It can be offered standalone or as part of complete Treasury Management services offered by a bank.
What Is a Lockbox?
A lockbox is not just a mailbox or P.O. Box. A modern lockbox is a complete check processing service. 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. Every day by a deadline of your choice, the bank will retrieve, digitize, process and deposit payments received. You will be provided images, daily reporting and customized files that can be integrated into your accounting platform.
What Are the Benefits?
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 highvolume and small amounts, your business can be accommodated.
Is Lockbox Service Right For Your Business?
There is no magic threshold of payment quantities. Contact me for more information, cost and ROI estimates.