The fastest way to collect cash from customers is via ACH or wire transfer and there continues to be a move toward these two types of cash collection. Currently though, checks are still king and that means 3-5 days until banks clear the checks and the funds are available in your bank account.
If you want to speed up the cash conversion for checks you could utilize a lockbox. There are three main types:
- Electronic – which can accept digital payments
- Retail – mainly used for low-dollar, high-volume payments
- Wholesale – used primarily for high-dollar, low-volume payments
Many businesses use a combination of those, with education and healthcare organizations leading the pack in mixing-and-matching. One way that companies can get the cash in the bank faster is to develop a lockbox strategy based on customer location; the closer the lockbox to the customer, the shorter the time for the payment to reach it. Also, print the lockbox address right on the invoice to expedite payment.