Continually shifting lockbox locations is not recommended, since it annoys the accounts payable employees of customers, which must keep updating the pay-to addresses in their computer systems.Ī lockbox system is an excellent way to reduce mail float for a larger company that has a national or international customer base. If not, lockboxes are shifted to more customer-centric locations, and customers are notified to alter their remit-to addresses to the new locations. For example, a company in Boston may elect to have lockboxes in Chicago, Los Angeles, Houston, and Miami, in order to reduce the mail float for payments made from customers located near these cities.īanks provide a periodic reviewing service to match the addresses from which customers are issuing their payments to lockbox locations, to see if the lockbox configuration is optimized. A lockbox system is encouraged by banks, which earn a fixed monthly fee for each lockbox, as well as a servicing charge for each payment processed. The scanned images are posted to a secure website, where the company's accounting staff can access the images to apply payments to outstanding accounts receivable.Ī lockbox system is an arrangement of several lockboxes that are strategically placed near geographic clusters of company customers, so that aggregate mail time from the customers to the lockboxes is minimized. The bank opens the incoming mail, deposits all received funds in the company's bank account, and scans the payments and any remittance information.

A lockbox is a bank-operated mailing address to which a company directs its customers to send their payments.

Postal key lock box