Companies have historically utilized receivables lockbox services from their banks to streamline collection and posting of checks received from their customers. With this service, checks are sent directly to a lockbox that is monitored by the bank, which collects them at frequent intervals throughout the day. This way, checks are deposited with same-day ledger credit.
Receivables lockbox has now entered the digital age with eLockbox, an electronic lockbox designed to accommodate businesses’ electronic receivables processing needs. With eLockbox, consumer payments made through their banks’ online banking and other bill pay services are consolidated and funds and posting data are delivered electronically.
Fast, Straight-Through Processing
“eLockbox streamlines consumer payments rather than allowing these transactions to become slow-moving bill pay checks,” says Cadence Bank Senior Vice President and Treasury Management Sales Manager Lori Johnson. “The posting data is integrated with the lockbox posting data file, which results in fast, straight-through processing that maximizes efficiency.”
Here’s how e-Lockbox works: Your customers initiate payments through their online banking or other bill pay website. eLockbox consolidates payments and generates a data file, with payments either routed automatically or pre-processed. Funds then arrive in your company’s bank account via a single ACH daily deposit, while data is delivered to you in your desired format for easy, accurate posting.
“Paper processes and manual posting are converted into an electronic workflow for payment and posting,” Johnson explains. “We’ve designed eLockbox to be a more efficient, flexible and easier-to-use electronic solution when compared to paper bill pay check processing.”
What About Wrong Account Numbers?
Wrong account numbers aren’t uncommon in the world of consumer online banking and bill pay. With eLockbox, these can be corrected through a positive file process that will auto-accept any payment with correct account information. Payments that aren’t auto-matched on the positive file (e.g., exception payments) are then queued up in PreProcess for research.
PreProcess fixes wrong account numbers once and for all because payments corrected in PreProcess can be flagged to auto-match in future months. Whenever the same error is detected in the future, the system automatically assigns the correct account number.
Benefits of eLockbox
eLockbox is used primarily by retail businesses. The benefits of eLockbox are extensive and include the following:
- Virtually all bill pay checks are eliminated.
- Businesses receive payments two to three days faster compared to checks in the mail.
- Payments are posted directly and automatically to the appropriate account.
- Staff spends less time managing exception items.
- Businesses receive faster access to funds since payments are transferred directly to their bank account via a single daily ACH deposit.
- It’s easy for businesses to make corrections when customers provide inaccurate account information.
- Once these corrections are made, payments are automatically routed correctly in the future.
- Payment information is delivered in the desired format, which allows for easy, error-free posting.
“Perhaps the biggest benefit of eLockbox is economical,” says Johnson. “It provides businesses with a more cost-effective solution than manually processing bill pay checks or utilizing traditional receivables lockbox services.”
Johnson points to a Cadence Bank client that recently began using eLockbox. “eLockbox accelerated their cash flow by converting the paper check items that were coming through bill pay to an electronic credit to their account. They received these deposits two to three days faster than they did in the past.”
She added: “The automated posting feature significantly reduced the number of items their staff had to post manually. Therefore, staff members were able to utilize that time to focus on other tasks within the company. eLockbox brought significant value to the company’s bottom line.”
Learn how you can also improve your accounts payables processing with Payables Lockbox – and how one company saved nearly 40 hours per week.
If your company receives a high volume of retail payments from customers via online banking and other bill pay services, you could benefit tremendously from Cadence Bank’s new eLockbox service. To learn more about eLockbox, please contact your Cadence Bank treasury management representative.
This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.