With lockbox processing, your clients send their payments directly to a lockbox at your bank. Then, the bank employees empty the box, deposit the cheques for you, and send you a report of the payments. Offered by the Royal Bank of Canada as well as numerous other banking institutions, this process has advantages and disadvantages based on your situation. If you receive a lot of cheques, lockbox processing can save you time. If you receivables are sent directly to your office, your employees have to open envelopes, enter cheque amounts in your accounting software, and take deposits to the bank. With lockbox processing, bank employees handle most of those tasks for you. If the bank offers automatic or digital bank reconciliation, you don’t even have to worry about entering the numbers into your accounting software. Instead, that process happens automatically. Additionally, lockbox processing typically speeds up deposit times so you have access to your money faster. However, lockbox processing is not cost-effective for all businesses. Many financial institutions charge for lockbox processing on a per-item basis. As a result, if you receive lots of cheques for small amounts, the costs may outweigh the advantages. Typically, lockbox processing appeals to utility companies, lenders, and others who process multiple payments every month. However, the service also appeals to companies with clients in far-flung locations, as the lockbox provides a central place to mail payments.
2017-02-15 00:00:00 2017-02-15 00:00:00 https://quickbooks.intuit.com/ca/resources/cash-flow/use-lockbox-processing-streamline-receivables Cash Flow English Review the advantages and disadvantages of lockbox processing, and learn how lockbox processing can help with automated bank reconciliation. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Accountant-Discusses-Using-Lockbox-Processing-To-Streamline-His-Companys-Receivables-With-The-Bank-Manager.jpg Use Lockbox Processing to Streamline Receivables
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