Many commercial banks have departments that specialize in helping nonprofits manage cash and allow nonprofits to benefit from the bank's economies of scale. In addition to banks, other service providers offer lockboxes. And bank trust departments and brokerage firms offer many options for investment opportunities. Collect Cash Quickly Your nonprofit can use lockbox services to speed cash collection. Rather than your staff receiving checks and processing, recording and depositing them, the nonprofit sends funds directly to the lockbox, where bank staff processes and deposits them more quickly.
Lockboxes can be either paper or electronically based.
Their cost depends on the complexity of the service desired. For instance, in addition to merely collecting remittances, the bank can capture data and transmit deposit details to the nonprofit. The bank does not honor any checks presented for payment that differ from or are not on the list. Using check numbers and amounts provided by the nonprofit, the bank furnishes lists of cleared and uncleared checks to facilitate reconciliation. In the morning, the cash plus earnings are made available to the nonprofit.