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Lockbox Processing

Lockbox Processing

Since cash concentration is an important part of the banking services required by the University, it is important to collect the funds in an effective and efficient manner. Lockbox services are an integral part of the collection service. With a lockbox, a bank or third party receives mail at a specified lockbox address (P.O. Box), preferably one with a unique ZIP code, processes the remittances, and deposits them in the payee's account. The University uses a retail lockbox for collection of student fees, student loans, residential life payments, University Physicians payments and accounts receivable payments. Wholesale lockbox is used for certain types of payments to University Hospital and accounts receivable payments.

  1. Retail lockbox - A retail lockbox is characterized by a remittance, which is part of the invoice sent to the consumer. The consumer is asked to send the return document with the check. The return document has a scan line, which contains information such as the payers' account number, total amount due, minimum amount due and the due date. The scan line is read by automated processing equipment to capture data, which is used to update a company's/individuals accounts receivable. A retail lockbox is oriented toward processing remittances at the lowest possible cost.
  2. Wholesale lockbox - A smaller volume of transactions, but higher dollar payments characterizes a wholesale lockbox. A remittance document is not utilized and key information, such as customer number, invoice number and dollar amount is manually input into a file by the bank.

 

If you are interested in lockbox processing please contact UM VP FA Cash Management.

Reviewed 2013-05-23.