The document discusses lockbox processing, which is a cash management service provided by banks to corporate customers. It involves banks collecting and depositing check payments that customers mail in, along with remittance documents. The key benefits of lockbox processing are faster access to funds, more timely receivables information, and reduced processing costs through automation. Examples are provided of how major banks have implemented successful lockbox solutions for corporate clients.

1. -- Some times think “Inside Box”

2. Thank You

3. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

4. File Processors
 Do your customers mail payments to you?
 Are your customers dispersed across a region or the
country?
 Do you hold checks over a day or two because your
staff doesn’t have the time to process them?

5. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

6. Majorly used File processors
 Lock - Box Processing
 Swift MT 940

7. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

9. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

10. US Bank File: New AR Payments
Customer
Customer
Invoice
AR Payment
Check
Bank
Lock Box

11. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

12. Customer
Collecting
Money
Own Bank
Customer
Bank
AR, Payment
Check
US Bank File: Collected AR Payments
collected check numbers
Payment Receipts

13. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

14. Benefits of Lockbox
 A streamlined customer payment process,
 Reduced overhead costs due to process automation,
 A decreased error rate.

15. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

16. How do you prevent this type of
crime?
 Monitor lockbox operations more closely;
 Locate lockbox operations far from a photocopy
machine;
 Make random, unexpected visits to the lockbox area;
 Be careful who you hire;
 Be alert to the possibility of fraud; such as when a
customer notifies you that a counterfeit item has been
paid on his account.

17. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

18. What can lockbox banking do for
you?
 Faster access to your funds
 More timely receivables information
 Customized Remittance Processing
 Greater Remittance Processing
 More Efficient use of your office Staff

19. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

20. Highlights of lockbox banking
 Lockbox processing is a cash management service provided by
banks to their corporate customers. Lockbox services are
designed to accelerate the collection and deposit of check
payments, sent with accompanying remittance document(s),
through the mail.
 Lockbox services are provided almost exclusively by large banks.
Of a total of 4.1 billion checks processed by U.S. banks in lockbox
operations in 1994, 75 percent were processed by banks with over
$5 billion in assets, and over 98 percent were processed by banks
with over $1 billion in assets.
 Retail lockbox tends to involve higher processing volumes than
wholesale lockbox. The leading retail lockbox bank processes
about 27 million items per month, while the leading wholesale
lockbox bank processes only about 4 million items per month.

21. Few more numbers
 The primary cost component of lockbox processing is
the per item fee. For wholesale lockboxes, the per item
fee might range from $.50 to $1.00. For retail lockboxes,
the per item fee might range from $.15 to $.30 for
matched items (i.e., one coupon and one check with
matching dollar amounts).

22. Numbers Contd…
The per item fee for retail lockbox items is increased
for:
 Multiples (i.e., one coupon with more than one check
or the reverse),
 Mismatched items (i.e., coupon and check amounts do
not match),
 Check only (i.e., no coupon), and
 Reject items (e.g., coupon only with no check).

23. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

24. The one fund Boston turn tragedy into
triumph (Bank success in Lock Box)
 The bank team cleared a backlog of 10,000 pieces of mail
just 36 hours after going live,” Gandolfo says. “We
centralized all cash and check donations and captured
envelope images to track donor addresses, which makes
it possible to communicate with them in the future.”

25. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

26. Lockbox in nutshell
 Reduced float, including mail and processing float.
 Accelerated funds availability.
 Receipts are transmitted for automated download and
posting/crediting to individual accounts by government
treasurers.
 Improved accuracy in the collection process.
 An audit trail is established.
 Reduced internal staffing costs due to outsourcing and/or the
reallocation of staff to higher-value tasks.
 Reduced processing delays that would have been associated with
sick time, vacation, and holidays taken by internal staff.
 Possible reduction in future hiring and training needs associated
with growth in payments.

27. Agenda
 File Processors
 Majorly used File processors
 Lock Box
 US Bank File: New AR Payments
 US Bank File: Collected AR Payments
 Benefits of Lockbox
 How do you prevent this type of crime?
 Highlights
 What can lockbox banking do for you?
 Highlights of lockbox banking
 Bank Examples
 Lockbox in nutshell
 European Processing: SWIFT MT940

28. European Processing: SWIFT
MT940
 Commonly used throughout Europe
 It is exclusively used for Bank Statement lines.
 The SWIFT MT940 files has a predefined structure of,
 Header
 Section with transaction
 Footer

29. Advancements in Lock-Box
 Intelligent character recognition (ICR),
 Optical character recognition (OCR), and
 Courtesy amount read (CAR).