In cash management, what is the primary purpose of a bank 'lockbox' service offered to corporate customers?

Introduction / Context:
A lockbox is a treasury service wherein a company directs its payers to mail remittances to a special post office box monitored by the company’s bank. The bank collects, processes, and deposits the funds directly into the company’s account, accelerating cash availability and reducing internal handling time.

Given Data / Assumptions:

• The “bank customer” is the company subscribing to the service.
• Customers (payers) send checks to the lockbox address.
• The bank credits the company’s account quickly after processing.

Concept / Approach:

The lockbox’s primary purpose is to deposit payments on behalf of the bank’s corporate customers, speeding cash application and improving cash flow. It is not a night depository for cash, not an automatic bill-pay system, and not a document storage vault service, even though related services may exist alongside lockboxes (e.g., remittance imaging and data transmission).

Step-by-Step Solution:

Verification / Alternative check:

Treasury management references describe lockboxes as accelerating receivables by outsourcing mail receipt and deposit to the bank.

Why Other Options Are Wrong:

Night deposit (cash when closed) is a different service.

Automatic bill payment pays out funds, not deposits incoming remittances.

Vault storage is a safekeeping service, not receivables processing.

None: Incorrect because the lockbox explicitly deposits payments for the bank’s customers (corporations).

Common Pitfalls:

Misreading “bank customers” as retail payers; here it refers to the corporate client using the lockbox service.

Final Answer:

depositing payments to bank customers