How a Reverse Lockbox Works

Reverse lockbox technology is emerging as an effective response to inefficiencies and lost opportunities in accounts receivable organizations. Knowing that your business needs a reverse lockbox is one thing—understanding how a reverse lockbox works is another story.

Regardless of the technology you currently use for accounts receivable processes, the implementation of a reverse lockbox solution represents an important step forward for your financial supply chain. By learning how a reverse lockbox works, you can improve efficiency, reduce costs and generate new opportunities through your accounts receivables program.

How a Reverse Lockbox Works: A Step-by-Step Guide

Direct Insite’s PAYBOX® reverse lockbox is a cloud-based, end-to-end receivables platform that combines, e-invoicing, online approvals and adjustments, and electronic payments. Capable of fully integrating with any existing AR system or lockbox platform, PAYBOX provides exceptional functionality and operational efficiencies to some of the world’s largest corporations and enterprises.

For most corporations, the first step toward improving AR effectiveness is to understand how a reverse lockbox works:

Step 1: Electronic Invoice Presentment

With a reverse lockbox solution, billers upload invoice information to a secure website that allows payers to access e-invoices using a password-protected mailbox. Reverse lockboxes eliminate the need for paper-based invoices and provide suppliers with a notification when payers receive their invoices. Additionally, suppliers have visibility to the real-time status of payments that are scheduled through the lockbox solution.

Step 2: Approvals and Adjustments

Reverse lockboxes streamline the process for buyers by allowing them to instantly view and approve e-invoices, or effortlessly place them in electronic workflows for approval and dispute management based on pre-configured business rules. In essence, advanced lockbox technologies provide seamless integration with payers’ workflows, creating opportunities for faster dispute resolution and shorter payment cycles.

Step 3: Electronic Payments

A reverse lockbox gives payers the ability to control the amount they pay, the payment type and the settlement date. In many cases, electronic payment portals allow payers to earn rebates for paying approved invoices via p-card. For suppliers, electronic payments simplify processing, tracking and remittance posting, reducing the cost of payment capture.

Step 4: Receivables Posting

Advanced reverse lockbox solutions provide sellers with electronic remittance files for straight-through processing, eliminating the need for manual keystrokes or delays in cash application. The best reverse lockbox technologies also allow for dynamic discounting and supply chain financing offers.

Implementing a Reverse Lockbox Solution

Direct Insite’s PAYBOX reverse lockbox solution is offers an exceptional combination of features and functionality for both billers and payers. PAYBOX is cloud-based, PCI compliant and capable of processing a variety of payment types, including ACH and credit cards. To mitigate risk and protect the value of your existing IT investments, PAYBOX fully integrates with legacy technology and ERP platforms.
Ready to learn more about how a reverse lockbox works to improve accounts receivable in your organization? Call us today at (610) 212-2487 for more information about PAYBOX or to schedule a private consultation.

Integrated Receivables