What Is Lockbox?
A bank-managed service where customer payments are sent to a special PO box for faster processing.
Detailed Explanation
The bank opens mail, deposits checks, and transmits remittance data to the seller. Lockbox services reduce float and speed up cash application.
Example
A utility company uses a lockbox service to process thousands of customer check payments daily.
Why It Matters
Accelerates cash availability and reduces manual payment handling for high-volume businesses.
Related Resources
Related Payment Terms Terms
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