E Lockbox

What is an e-lockbox?

An e-lockbox is a digital system used for processing and managing payments or checks received by a business or organization. It is a secure online platform that enables the electronic collection and processing of payments, replacing the traditional physical lockbox process.

How does an e-lockbox work?

When customers mail payments to a company's e-lockbox, the checks are received and processed by a lockbox service provider. This third-party provider will open the mail, scan the checks, and transmit the payment information electronically to the company.

The company can then use this data to automatically update their accounts receivable records. The physical checks are securely stored and later deposited directly into the company's bank account by the lockbox provider.

E-lockboxes eliminate the need for companies to manually receive, sort, and record mailed payments. The automated process improves payment processing speed, reduces errors, and improves cash flow by getting funds deposited faster.

Companies are provided with real-time data on payments received and can integrate e-lockbox systems with their accounting software, ERP systems, and bank accounts. Advanced e-lockboxes can scan remittance documents and transmit payment details directly for auto-reconciliation.

For financial departments, e-lockboxes improve inbound payment management and cash application. The increased speed, visibility, and automation mean improved liquidity and working capital for businesses utilizing this financial service.

6 benefits of using an e-lockbox?

E-lockboxes have several benefits compared to traditional paper lockboxes:

1. Convenience: E-lockboxes allow agents and lenders to access documents electronically anytime from anywhere, eliminating the need to physically go to the lockbox location. This saves time and effort.
2. Security: E-lockboxes store documents in secure online portals with user authentication and access controls. This is typically more secure than paper lockboxes which can be physically accessed by multiple people.
3. Real-time document access: Agents and lenders can access the latest documents instantly as soon as they are uploaded to the e-lockbox, whereas with paper lockboxes there may be delays in retrieving new documents.
4. Reduced costs: E-lockboxes tend to have lower costs than traditional lockbox services due to the efficiencies of electronic document storage and sharing.
5. Reduced document loss: Electronic documents in e-lockboxes have virtually zero risk of being lost or damaged compared to paper documents which can be accidentally misplaced, damaged by moisture, etc.
6. Automation: E-lockboxes integrate with other software systems to automate certain tasks like notifying relevant parties when new documents are uploaded. This level of automation is not possible with paper lockboxes.

Are e-lockbox systems secure?

E-lockbox systems can be secure if properly implemented, but they do have risks that need to be managed.

Some of the security measures that can be taken to eliminate the risks are listed below:

• Encryption: E-lockbox providers should encrypt all customer documents at rest and in transit using strong encryption techniques.
• Firewalls and malware protection: Providers should deploy robust network firewalls, antivirus software, and other malware defenses for their systems.
• Multi-factor authentication: Requiring users to authenticate with two or more factors (like a password plus a one-time code) increases security of e-lockbox systems.
• Activity logging and monitoring: Logging and monitoring user activity can help detect any unauthorized access attempts.
• Regular security audits: Providers should undergo regular, independent security audits to identify and address any vulnerabilities in their systems.
• Security policies and training: Providers need security policies and procedures that are enforced, as well as security training for their staff

Can an e-lockbox handle different payment types?

Most modern e-lockbox systems can support integrating with and handling multiple payment types. Here are some of the main payment types that e-lockboxes typically support:

1. ACH payments - These are electronic bank-to-bank transfers using the Automated Clearing House (ACH) network. E-lockboxes can integrate with ACH providers to enable automatic processing of ACH payments received from customers.
2. Wire transfers - E-lockboxes can connect to banks to receive notification of incoming wire transfers and automatically match the payments to the correct customer accounts.
3. Credit and debit card payments - Many e-lockbox providers partner with payment processors to enable customers to make credit or debit card payments that get routed directly into the e-lockbox system.
4. Online checks - Some e-lockbox providers offer the ability for customers to pay with online checks by entering their bank account and routing numbers. The payment is then processed electronically.
5. Online payments - Customers can often make one-time or recurring payments directly within an e-lockbox portal using a credit card or bank account.
6. Invoice payments - E-lockboxes can integrate with invoicing systems so that customers can pay invoices electronically via the available payment options.