The lockboxes is the most widely used device to speed up collections of cash. It is specials post box set up to intercept accounts receivable payments. It is a centralized collection service for corporate payments to reduce the delay in check clearing, or the float.
Two types of lockboxes are offered by banks:
→ Wholesale lockboxes are used in processing a small number of large dollar checks.
→ Retail lockboxes are used for processing a large number of smaller checks