A lockbox service allows businesses to receive payments directly to a secure post office box controlled by their bank, saving time and increasing security. Banks can provide detailed reports and even import payment data directly into accounting software. Historical reports can also help in the event of data loss.
One of the banking services that businesses of all sizes may find useful is a lockbox service. Essentially, a safe deposit box is simply a post office box that your bank sets up for your business and that the bank will control. A sender is sent to the address that will allow your clients to send the payment of all the invoices issued by your organization directly to the safe deposit box. In turn, your bank will open all correspondence, deposit checks into your accounts, and provide you with electronic access that allows you to view daily activity. In short, your bank becomes the means by which you collect accounts receivable and deposit into your operating, payroll, or other designated business account.
There are several advantages to securing a safe deposit box for your business. One of the most important is security. In general, safe deposit boxes are protected beyond the usual security measures associated with having a PO Box. When a payment arrives in your safe deposit box, the chances of it falling into the wrong hands are slim to none. This can give you and your customer base a sense of comfort.
Second, the lockbox procedure can make it easier for you to post payments to your accounting system. Many banks can provide details about deposited payments including images of the checks and any other documents that come with the check. Often a daily batch of receipts can be downloaded as a PDF and used to manually enter into your system. This method saves your accounting team from having to open the mail and sort the checks before entering the data. In addition, it eliminates the need to prepare a bank deposit.
However, you may be able to save even more time, depending on the type of accounting software you use. Many banks can provide a delimited report that can be directly imported into some accounting software systems. If you are lucky enough to have compatible software, the task of posting payments can take a few minutes, even if the list of payments runs to hundreds.
A third advantage of the safe deposit box system is that it has a history of supporting your accounts receivable. In the event that something major occurs with your software accounting system and you lose some or all of your data, historical reports on lockbox activity can help you start the rebuilding process. This means you can update your customer accounts quickly, as well as start rebuilding your Income and Expense report month by month.
While a lockbox doesn’t perform any functions that your accounting team couldn’t do for you, the advantages of saved time, backup source of information, and enhanced security make a lockbox system a very attractive option. . Check with your bank today and see what they have to offer in the way of a lockbox program.
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