Movement of cash from different lockbox locations into a single concentration account from which disbursements and investments are made.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A service that a bank provides in which it processes payments for a company. The company directs its customers to send payments to a lockbox at the bank, which then collects the payments and deposits them directly into the company's account. A concentration service reduces time between the receipt and processing of payments, which can be beneficial for the company using the concentration service. On the other hand, it comes with the possibility of fraud by bank employees, who could steal the payments by taking the funds and not depositing them.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved