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Bank Lockboxes -
A
Key to Faster Payments |
Does your company receive payments by snail mail? There's an easy way
to improve your cash flow and save a bundle in the process.
Simply
set up a "lock box" account.
With this approach, your customers mail their payments to a bank or
post office box that is emptied at least once a day. The checks are immediately
deposited into your account.
The bottom line: Your company gets its money
faster and can begin earning interest. Using a lock box can save one,
two, or even three days in processing time. You also reduce the risk of
losing payments and eliminate the clerical costs involved in processing
checks since the bank handles the entire transaction.
Some banks charge a small fee
for this service but it's generally a bargain. As part of the deal,
banks typically provide regular reports on your lock box activity. Some
even make it possible to monitor your account on the Internet.
Generally
speaking, banks that offer this service tend to be large, with assets
of several million dollars.
A word of caution: After you set up a lock box
account, instruct the bank to contact your office when it receives
checks marked "payment in full." You may have difficulty collecting the
balance if these type of checks are deposited and later turn out to be
just partial payments.
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