What is a lockbox?
A lockbox is a bank service, used mainly in the US, that collects customer payments by cheque on a company's behalf. Customers mail payments to a post office box run by the bank, which opens the mail, deposits the cheques and sends the company a file of payment and remittance details for cash application.
Also calledbank lockboxlockbox service
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- Used mainly in
- United States
- Two types
- Retail and wholesale
- Feeds
- Cash application
How a lockbox works
Banks offer two kinds. A retail lockbox handles high volumes of small consumer payments that arrive with a standard payment coupon; a wholesale lockbox handles business-to-business payments, which are larger and arrive with varied remittance documents. The bank scans each cheque and remittance, deposits the funds, usually the same or next business day, and sends images and a data file. The finance team then applies the cash: matching each payment to open invoices in the ledger. That matching is where software now works, reading lockbox files, remittance emails and bank data together; Stuut, Monk and Fazeshift automate cash application alongside collections.
Common questions
What is the difference between a retail and a wholesale lockbox?+
Retail lockboxes process large volumes of small consumer payments with standard coupons. Wholesale lockboxes process business payments, which are fewer, larger and arrive with invoices or remittance letters that need more handling.
What is lockbox cash application?+
Using the bank's lockbox file to match each payment to the customer's open invoices and post it in the ledger. Payments without clear remittance details become exceptions for the receivables team.
Are lockboxes still used?+
Yes, by US companies whose customers still pay by cheque. Many companies now run cheques from the lockbox and electronic payments through the same cash application process.
Cash application software for lockbox payments
StuutAI agents running collections, cash application and disputes end to end.Profile →
MonkAI-native receivables with automated collections and cash application.Profile →
FazeshiftAI agents automating accounts receivable for enterprise finance teams.Profile →
Paraglide AIAI agents handling invoice chasing and reconciliation.Profile →
KollenoAI-prioritised collections, payments and reconciliation.Profile →
CentimeAP, AR, forecasting and banking in one cash flow view.Profile →Part of Accountio’s accounting technology coverage · Glossary
