Why Your Business May Need a Lockbox Solution

Author: Barry Gideon, Senior Director of Commercial Payments and Channel Sales

Whether your business serves consumers or other commercial entities, fast and efficient payment processing is key to managing cash flow and maintaining profitability. While the rise of digital payment capabilities has accelerated transaction speeds and lowered internal costs, one simple fact remains: 75% of businesses and 17% of consumers continue to pay for goods and services by check. Another fact? Those checks are costing you between $4 and $20 every time your customer or client opts for paper over electronic payments.

Consider the labor-intensive tasks associated with check processing. Internal teams must open mail, sort checks, enter payment receipts, fill out deposit information, and either drive the check to the bank or initiate a digital deposit. Your business then must wait for the check to clear and the funds to become available before reconciling it with the general ledger.

The very nature of the process reduces internal efficiency and drives up days sales outstanding (DSO), impeding your ability to manage liquidity and predict cash flows. Fortunately, there is a better way to manage check payments. A Lockbox solution accelerates check processing, reducing settlement times as well as administrative burdens.

What Is a Lockbox Solution?

With a Lockbox solution, checks are mailed to a secure post office box held in your company’s name and controlled by your bank. Once received, payments are scanned and deposited into your account on the same day.

Businesses can view image scans of each deposited check, as well as any correspondence received, through an online portal. Other services, such as exception viewing and resolution or remote deposit capture, are also available.

While Lockbox services are particularly beneficial for businesses that receive a high volume of check payments, such as healthcare and utilities providers, the benefits extend to multiple organizations and payment needs.

Benefits of FNBO’s Lockbox Solution

FNBO’s Lockbox facility operates 24 hours a day, 365 days a year, ensuring timely deposit of payments. Our senior staff has a minimum of 20 years of payments experience to ensure tight quality control, and because we maintain our own internal programming resources, we’re able to deliver competitive rates to our customers.

FNBO’s Lockbox streamlines business payments while delivering several advantages to organizations who still receive checks:

• Improved Accounts Receivable Efficiency: Checks are received and processed daily, with funds deposited directly into your account. No more preparing deposits and driving to the bank or collating a digital upload, which reduces administrative costs and burdens.
• Security: Instances of mail theft are increasing. Checks sent to your place of business can be lifted directly from your company mailbox and altered. With Lockbox, check payments are delivered to a secure facility instead of an exposed mailbox, protecting check payments from theft.
• Faster Payment Processing and Improved Cash Flow: Since checks are collected and processed daily, businesses reduce float time and days sales outstanding. Receiving funds faster enhances liquidity and financial stability.

FNBO’s Lockbox solution offers businesses a faster, more secure and cost-effective way to process check payments, reducing administrative costs while improving cash flow and efficiency. By outsourcing check handling to a trusted provider, your business can minimize risks and ensure timely access to funds, making it a valuable tool for managing check payments.

Contact us to learn more about our Lockbox solution.

About the Author:

Barry serves large Corporate Treasury Services clients with complex needs. He is a dedicated source of expertise, helping customers to navigate the continually evolving payments landscape. Barry also serves a significant portfolio of Fintech companies with payment-centric business models, capitalizing on FNBO’s long-standing reputation as one of the nation’s 15 largest originators of ACH transactions with significant experience in the nuances associated with third-party ODFI/ACH processing.