Lockbox --Think inside Box.

Lockbox-- Some times think “Inside Box”

Thank You

AgendaFile ProcessorsMajorly used File processorsLock Box

US Bank File: New AR Payments US Bank File: Collected AR Payments

Benefits of LockboxHow do you prevent this type of crime?Highlights

What can lockbox banking do for you? Highlights of lockbox banking

Bank ExamplesLockbox in nutshellEuropean Processing: SWIFT MT940

File ProcessorsDo your customers mail payments to you? Are your customers dispersed across a region

or the country? Do you hold checks over a day or two

because your staff doesn’t have the time to process them?

Majorly used File processors

Lock - Box Processing

Swift MT 940

US Bank File: New AR Payments

Customer

Customer Invoice

AR Payment Check

Bank

Lock Box

Customer

Collecting Money

Own Bank

CustomerBank

AR, Payment Check

US Bank File: Collected AR Payments

collected check numbers

Payment Receipts

Benefits of LockboxA streamlined customer payment process, Reduced overhead costs due to process

automation, A decreased error rate.

How do you prevent this type of crime?Monitor lockbox operations more closely; Locate lockbox operations far from a photocopy

machine; Make random, unexpected visits to the lockbox

area; Be careful who you hire; Be alert to the possibility of fraud; such as when a

customer notifies you that a counterfeit item has been paid on his account.

What can lockbox banking do for you?

Faster access to your funds More timely receivables information Customized Remittance Processing Greater Remittance Processing More Efficient use of your office Staff

Highlights of lockbox bankingLockbox processing is a cash management service provided by

banks to their corporate customers. Lockbox services are designed to accelerate the collection and deposit of check payments, sent with accompanying remittance document(s), through the mail.

Lockbox services are provided almost exclusively by large banks. Of a total of 4.1 billion checks processed by U.S. banks in lockbox operations in 1994, 75 percent were processed by banks with over $5 billion in assets, and over 98 percent were processed by banks with over $1 billion in assets.

Retail lockbox tends to involve higher processing volumes than wholesale lockbox. The leading retail lockbox bank processes about 27 million items per month, while the leading wholesale lockbox bank processes only about 4 million items per month.

Few more numbersThe primary cost component of lockbox

processing is the per item fee. For wholesale lockboxes, the per item fee might range from $.50 to $1.00. For retail lockboxes, the per item fee might range from $.15 to $.30 for matched items (i.e., one coupon and one check with matching dollar amounts).

Numbers Contd…The per item fee for retail lockbox items is increased for:

Multiples (i.e., one coupon with more than one check or the reverse),

Mismatched items (i.e., coupon and check amounts do not match),

Check only (i.e., no coupon), and Reject items (e.g., coupon only with no

check).

The one fund Boston turn tragedy into triumph (Bank success in Lock Box)

The bank team cleared a backlog of 10,000 pieces of mail just 36 hours after going live,” Gandolfo says. “We centralized all cash and check donations and captured envelope images to track donor addresses, which makes it possible to communicate with them in the future.”

Lockbox in nutshellReduced float, including mail and processing float. Accelerated funds availability. Receipts are transmitted for automated download and

posting/crediting to individual accounts by government treasurers.

Improved accuracy in the collection process. An audit trail is established. Reduced internal staffing costs due to outsourcing and/or

the reallocation of staff to higher-value tasks. Reduced processing delays that would have been associated

with sick time, vacation, and holidays taken by internal staff. Possible reduction in future hiring and training needs

associated with growth in payments.

European Processing: SWIFT MT940

Commonly used throughout EuropeIt is exclusively used for Bank Statement lines.The SWIFT MT940 files has a predefined structure

of,HeaderSection with transactionFooter

Advancements in Lock-Box

Intelligent character recognition (ICR), Optical character recognition (OCR), and Courtesy amount read (CAR).

Lockbox --Think inside Box.

Economy & Finance

Transcript of Lockbox --Think inside Box.