A lockbox is simply a post office box used to collect checks that are
retrieved by a bank and processed around the clock to reduce float. Most
lockboxes are situated in major cities to reduce mail float. Ideally, a lockbox
would be established in a city or cities closest to customers remitting the
greatest number of checks or the greatest amount of dollars. Citizens mail
payments to a post office box that is emptied daily by the bank. Receipts are
immediately deposited and a record is sent to the government electronically,
by mail, or by courier. Some lockbox users prefer to receive a fax that lists the
dollar amounts of deposits and have copies of checks sent by regular mail.
Others prefer to pay extra for courier service and receive the information the
next day.More sophisticated users have the bank electronically update their
accounts receivable records. A lockbox can speed up collections because
checks are collected 24 hours per day and on weekends and are sent through
the check-clearing process more quickly.