Asked by Victoria Montanez on Jul 22, 2024
Verified
Implementing a lockbox system will decrease the total collection time for a firm.
Lockbox System
A lockbox system is a banking service used by companies to expedite the collection and processing of accounts receivable by having checks mailed directly to a bank-operated address.
Collection Time
The average period that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients.
- Comprehend the significance of implementing a lockbox system and preauthorized payments in reducing collection time.
Verified Answer
ZS
Zulfikarali SaiyedJul 23, 2024
Final Answer :
True
Explanation :
A lockbox system speeds up the collection and processing of receivables by having customers send payments directly to a bank or a secure post office box, reducing the total collection time for a firm.
Learning Objectives
- Comprehend the significance of implementing a lockbox system and preauthorized payments in reducing collection time.
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