Nonprofit Accounting Basics

Lockbox Deposits vs. Remote Deposit Capture

Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.

What's the fastest way to get the money in the bank if you are constantly receiving payments in the form of a check? Many nonprofit organizations have low and/or high cash receipts volumes depending on the time of the year. These receipts may consist of membership dues payments, meeting and event registrations, contributions, etc. What if they are being mailed to your organization’s office? Think about the amount of time and staff involved in the process if this is the case:


  • Someone has to sort through and open the mail.
  • Someone has to prepare the bank deposit slip and endorse each check.
  • Someone has to physically take the deposit to the local bank branch and do so before the cutoff time to get credit the same day.


Depending on the size of your organization, these duties may be spread among one or more individuals and can take anywhere from one to several days to complete. The process can even be further delayed if someone becomes ill, takes a vacation, or decides to leave the company and there is no one else in the office who serves as a back-up.

So what can you do to streamline the cash receipts process? Consider the options of using lockbox banking and/or remote deposit capture. Both tools are considered cash flow improvement techniques. They both reduce the amount of time it takes for money to hit your bank account(s) and become available for use. In addition, these services make the cash receipts processing more efficient.

Here are some of the highlights of using lockbox banking:


  • It accelerates the collection and deposit of check payments, sent with accompanying remittance document(s), through the mail.
  • Cash is received and deposited all within the same day.
  • One or more lockboxes can be established to accommodate the locations of your customers or types of receipt.
  • The bank's lockbox service typically has its mail delivered or picked up from the post office several times throughout the day whereas your office may only receive mail once each day.
  • Some banks are able to provide import data files that can be integrated with your accounting software and/or association management system to reduce the manual keying time related to recording these payments.


Here are some of the highlights of using remote deposit capture:


  • Allows users the ability to deposit checks into a bank account from one's office without having to physically deliver the actual checks to the bank.
  • Most banks offer extended cutoff times for deposit.
  • It cuts down on paperwork and reduces the chances of making mistakes or losing checks in the process of depositing them.
  • Checks returned for nonsufficient funds or similar tend to show up faster when processed through remote deposit.
  • The remote check scanner is portable and can be brought with you or your staff to annual meetings/conventions to deposit check payments received on-site.


Most large banks offer these deposit services to its business customers. Banks can customize their lockbox and remote deposit capture services and costs to fit your specific needs.

Whether you are a $2 million or $10 million organization, you may benefit greatly from using one or both of these services for your cash receipts process. Do not let the additional out-of-pocket costs deter you from implementing these cost-saving measures. In most cases, we have found organizations using one or both of these tools are able to reallocate staff time to more meaningful core functions that further an organization's mission, yielding both direct and indirect benefits to the bottom line. However, a full-cost analysis would need to be performed for your organization to determine the overall cost savings. For more information on these services, contact your banking representative.