Wholesale Lockbox
December 8, 2008 – 6:52 amThe original form of lockbox services—now commonly known as wholesale lockbox—was established to handle low-volume, high-dollar checks. Critical data fields are manually key-entered from the remittance document, such as the customer and/or invoice number, while check MICR data is captured in an automated flow as the documents pass through the bank’s reader-sorters. This process works effectively when there are a limited number of standard remittance documents and when an invoice copy is returned with the check. The bank can review its operating instructions and templates for the account, determine which data to key, and complete the transaction.
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One way to minimize wholesale lockbox problems is to review all remittance documents used for customer billing. A standard, understandable invoice should be used, with the only printed address being that of the lockbox. A company telephone number and internet address should be provided for questions and customer service, but no company address should be indicated. Include a return envelope for customer convenience, and make certain that the size of the remittance document and envelope match so that paper folds won’t occur over scan lines or barcodes.
Too many companies clutter their invoice packages, making them nearly indecipherable. The problem is compounded by the issuance of monthly statements, dunning letters requesting payment, and other correspondence. Make it as easy as possible for customers to pay; a commercial graphic designer can help.
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Customers that do not return remittance documents, or situations when banks receive multiple types of invoices, are a chronic problem for lockbox clerks and the company. Most companies instruct their banks to deposit all checks received, including those lacking adequate support detail. The company is then forced to work from the check copy and any other evidence, including the customer’s envelope and accompanying correspondence, to apply cash, move the cash item from suspense, and close the receivable.
Taken From : Essentials of Managing Corporate Cash
