Understanding Receiving Lockbox Deposits

Purpose:  Use this document as a reference for understanding how to receive lockbox deposits in ctcLink.

Audience:  Accounts Receivable

Understanding Receiving Lockbox Deposits

  1. To make funds available in your bank account soon after a payment arrives, you can set up a lockbox for your company in a financial institution. A lockbox is a bank account to which customers can remit payments.  If you have a lockbox, the financial institution receives payments and applies them to the lockbox.  This makes funds available to your company as soon as the payments are processed by the bank.  Usually, this happens the same day the payments are received.
  2. After the bank applies payments to your lockbox, you may receive a file from the bank that can be used to automatically load deposit details into ctcLink.  This eliminates the need for manually entering the information in Receivables.  Alternatively, you may receive information from the bank in hard copy format.  This information has to be entered manually.  The payments are identified by the bank and bank account from which they came.  Although each deposit in a lockbox is limited to a single currency, the file containing the information may contain several deposits and each deposit may be in a different currency.
  3. After the lockbox information is loaded, you can use either the payment worksheet or the Payment Predictor to match payments with open items by using reference information, such as the MICR ID, if the bank provides it.  If the bank does not provide this information, you can enter a regular deposit with the relevant payments and then add or correct any information received from the bank.  The payment information from the lockbox is reconciled with the receivable information stored in the receivables system to update customer balances.
  4. To summarize, a lockbox is an account to which customers can remit payments.  You can set up a lockbox in a financial institution to make funds available soon after payment arrives.
  5. Process complete.


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