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Payables Lockbox: Put Lockbox Technology to Work to Streamline Your Payables

Making payables processes more efficient increases cash flow & improves vendor relationships. Learn how to streamline your payables process with Lockbox.

Many companies today are placing a renewed focus on increasing the efficiency of their payables processes. Doing so can result in improved cash flow and better vendor relationships.
One way to make payables more efficient is to use lockbox services from your bank as part of your payables processing efforts. The same technology used to improve processing of your receivables can also be used to boost the efficiency of your payables processes.
“Businesses have historically focused on effective receivables processing, but we are now seeing more companies starting to focus on effective ways to manage their payables,” says Kacy Owsley, Cadence Bank Treasury Management Senior Vice President.




Streamlining the Payables Process

Migrating from a paper-based accounts payable system to an electronic database with online routing for payment approvals will streamline your invoice-to-pay process. Here is how payables lockbox works:
  • You will have your vendors send their invoices to a designated post office box, or email or fax them directly to the bank.
  • The bank will scan your invoices and enter all essential information, such as the vendor name, invoice number, invoice amount and any other pertinent information you request.
  • Invoice images are then electronically and securely routed so you can apply the general ledger and cost center accounts from which invoices will be paid. You then approve or deny each invoice for payment.
  • Once you have authorized invoices to be paid, payment files will be created that pay invoices per your instructions (e.g., by check or electronically via ACH). Positive Pay files are also uploaded by the bank to help prevent fraud.
  • Payment files are integrated back into your AP system each night so you can update your financial records.
Owsley says that converting your payables process to payables lockbox provides your business with benefits similar to those associated with receivables lockbox. For example, cash flows more smoothly, you avoid penalties for late payments, and your employees can concentrate on tasks that help build your business, rather than handling invoice payments.
“When compared to a paper payables system, an electronic payables management system provides your business with immediate cash forecasting tools, vendor analysis to promote potential negotiations, lower payment processing costs, and a scalable environment to support company growth,” says Owsley.



Cadence Bank’s Payables Lockbox

Cadence Bank’s Payables Lockbox solution is a true end-to-end offering that centralizes the receiving of invoices into the Cadence lockbox facility. “Therefore, our clients don’t have to worry about whose desk or which location the item has been mailed to,” says Owsley. The Cadence Bank solution expedites the routing of invoices securely via the Internet to the appropriate approvers with real-time status. “The final step allows for payment distribution with total integration into the company's accounting system,” says Owsley.
One of the biggest benefits of Payables Lockbox is that practically any sized business can benefit from the efficiencies it offers. “Whether your business pays 100 invoices per month or thousands of invoices every month, you can justify the cost of Payables Lockbox,” says Owsley. “It’s a great solution that fits into any business model trying to do more with less.”
Please contact your Cadence Bank treasury management representative to learn more about the benefits of Payables Lockbox to your company.


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.


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