Learn about OnPay Solutions' A/R Lockbox. Clear invoices and apply cash faster without a huge project and Capital expenditure!
As with most payment processing services, there are both pros and cons to lockbox banking. Lockbox banking provides companies with a very efficient way of depositing customer payments. This is especially beneficial if a company is unable to deposit checks on a timely basis or if it is constantly receiving customer payments through the mail.
On the other hand, lockbox banking can also be very risky. Bank employees who have access to here lockboxes are rarely supervised, which opens the situation up to possible fraud. The fraud primarily occurs in the form of check counterfeiting, because the checks that are in the lockboxes provide all the information needed to make counterfeit checks. A company can protect itself from such fraud by using a bank that it trusts and by constantly monitoring its lockbox.
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In banking, a lock box is a service offered by commercial banks to organizations that simplifies collection and processing of account receivables by having those organizations' customers' payments mailed directly to a location accessible by the bank.