Lock Box System And Concentration Banking Is Method Of

Lockbox banking is a service provided by banks to companies for the receipt of payment from customers.

Lock box system and concentration banking is method of. Several organizations use multiple banks. A lockbox system is a technique of collection of debt where local post office boxes maintained by bank of firm are collected. The lockbox system undertakes the following. A financial institution that is the primary bank of an organization or the bank where the organization does most of its transactions.

Concentration banking is the practice of shifting the funds in a set of bank accounts into an investment account from which the funds can be more efficiently invested. Under the service the payments made by customers are directed to a special post office box. In other words a firm has its operations in several parts of the country and in order to ease the complexity of handling multiple bank accounts at different locations the firm may opt for a concentration banking service whereby all the funds from different regional banks gets forwarded to a single bank account called as a concentration account. A banker is appointed by firm to control lock box.