The flow of checks through the banking system results in a time delay. This delay (which we refer to as “check float”) has value to the check issuer. The value is substantial in most cases. The check float available is determined by several factors:

  • Point from which a check is mailed to the vendor
  • Location of the vendor’s receiving location
  • Whether the vendor uses a lockbox
  • Location of vendor’s deposit bank
  • Location of the bank on which the check is issued (“drawee bank”)

Check float exists as a result of these factors:

  • The time it takes to mail the check from one point to another
  • The time it takes to process and deposit the check (usually zero for lock boxed deposits)
  • The time it takes for a check to clear the issuer’s account at the drawee bank

Most vendors consider a payment as having been made as of the postmark date on the envelope.  This is in accordance with the Uniform Commercial Code.  A few vendors insist that the check be “in hand” for deposit on the payment due date.   In any event, proper selection of mail points and drawee banks can materially increase the check float available to the issuer.  Returns exceeding $1 million annually are not unusual.

The ClearCycle solution would manage this process automatically. The Disbursement Management System© (DMS©) includes the proprietary databases:

  • Mail float – mail time from one point to another
  • Clearing float – time required for checks to clear specific banks
  • Lockbox table – location of vendor lockboxes

Our Disbursement Management System© dynamically selects the disbursement bank and the mail point based upon the criteria determined by the customer. Multiple mail points and disbursement banks can be implemented to manage this process. In addition, ClearCycle will perform yearly audits to ensure that expected results are realized. As an example, this audit will point out the movement of vendor’s lockboxes and develop a recommended strategy for whatever process change is appropriate, i.e. change disbursement banks, mail points, etc.


Washington Office:
7345 164th Ave NE Ste 145 #187
Redmond, WA 98052

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