Your thoughts on lock-boxes

CMA Member Poll: Your thoughts on lock-boxes (354 responses)

  • • 29% More good than bad
  • • 28% We do not use a lock-box
  • • 28% Can’t do without a lock-box
  • • 6% Wish we did not use a lock-box
  • • 5% More bad than good
  • • 4% Other answer

6 Comments on the survey:

With lockbox, customer payments are credited to our account the same day the bank receives the check. Having a lockbox also saves time because it eliminates the trip to the bank to deposit customer payments.
Posted by Arlene Aquino on November 1st 2010, 10:46pm

We are directing our customers to send all payments to our lock box. If invoices are matched with the correct amount, all items are applied automatically. Problems arise when short payments are made. Research has to be done and applied inhouse. All unapplied deposits have to be researched and applied accordingly. Biggest advantage of the lock box is that the dollars hit our account immediately.
Posted by Raj Prasad on November 1st 2010, 11:37pm

Having a lockbox saves time, money, and natural resources. First, I don’t have to visit the Post Office to retrieve payments, open the mail and make copies. I am spared the chore of endorsing each check, filling out a deposit slip, and making a trip to the bank. The cost of a lockbox service is not an issue compared to the savings it provides in time and money. Still, because we are all human and prone to error, you do need to watch for mistakes. Considering all the transactions bank employees process in a typical day though they do a good job. With it I can see what payments have come in from virtually anyplace in the world with good internet access. An alternative between the two is using a remote scanner. My preference though is eliminating the need to physically handle the incoming payments in any way. If you do go the locbox route be sure the service scans the check and the payment stub on the same page. That makes it simpler to extract the PDF image whenever a copy is needed. You don’t want them scanning page images that mix the EOP or check from one company with that of another. Naturally, any other explanations (for credits taken, etc.) should follow sequentially, prior to showing an image of another payment that came in that day.
Posted by Rex Brady on November 1st 2010, 11:54pm

We have multiple lockboxes for types of payments and the bank does the keying for us. We upload to our AR subsystem and review, confirm in balance and post or reseach variances. Money in bank same day and posting is done usually within an hour. Disadvantage is we are still not using imaging and rely on a courier to supply us with copies of checks, support or correspondence needed for research. Advantage is we are SOX compliant for delegation of duties and AR not physically handling checks. Overnights must have a physical address for delivery and may take an extra day to post depending on cutoffs.
Posted by Michelle Aljilani on November 2nd 2010, 12:22am

We have a lockbox located in a different major city to cuts down on mail time and get the money in the bank faster, courier brings the backup next day. This arrangement was set up many years ago with a 3rd party provider and the fees are still reasonable (that 3rd party couldn’t beat the rate themselves). We have explored other banks and found capabilites vary. Electronic files and keying data are available for a price which basically offsets the courier cost (but not by anything substantial). We also have a desktop scanner for local mail and checks that come in from our drivers or reps (it eliminated the need for photocopies). A mega bank eventually came to discuss the auto-posting possibilities. The hit rate wouldn’t have been satisfactory, plus we would have to have a costly interface written so the present volume doesn’t justify the cost yet, at this point my staff can still process cheaper and quickly.
Posted by D Marcroft on November 2nd 2010, 1:03am

We have a lockbox in central location within the U.S., which helps to cut down on mail time. The average number of days it takes to receive the mail, sent from throughout the U.S., is 3 days. We made the decision because somf of our larger customers are on the other side of the country. We have subscribed to the service where the lockbox personnel keys in the data and scan the checks along with the supporting documentation. We’re able to download the data from the bank’s website, then upload it to our transaction system. Our payment application module takes the information provided and tries to match it up with an invoice number, order number or PO number. Any numbers that can’t be matched our flagged. It works great! It allows us to handle the high volume of payments much quicker. We only focus on the exceptions instead of keying each check or invoice. Of course, it eliminates the risk and the time of making deposits at the bank. It also saves time when we don’t have pick up the mail at the post office. We are going to have to find other ways to get us of our bottoms and move around.
Posted by David Vaiz on November 3rd 2010, 9:31pm

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