Definition of 'Lockbox Banking'
There are several benefits to using a lockbox system. First, it can help a company to speed up its cash flow. By reducing the time it takes for payments to be received and processed, a lockbox system can help a company to improve its working capital and its ability to meet its financial obligations. Second, a lockbox system can help a company to reduce its costs. By outsourcing the collection and processing of payments to a third-party financial institution, a company can save on the costs of hiring and training employees to perform these tasks. Third, a lockbox system can help a company to improve its security. By having payments sent to a secure location, a company can reduce the risk of fraud and theft.
There are two main types of lockbox systems: single lockbox systems and multiple lockbox systems. In a single lockbox system, all of a company's customers send their payments to a single post office box or lockbox. In a multiple lockbox system, each customer is assigned a specific lockbox. This can help a company to improve its cash flow by allowing it to process payments more quickly and efficiently.
Lockbox banking is a valuable tool for businesses of all sizes. By using a lockbox system, a company can improve its cash flow, reduce its costs, and improve its security.
Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.
Is this definition wrong? Let us know by posting to the forum and we will correct it.