What is Processing Float?

Processing float is the time period between when a payee receives a payment from the payer and deposits it. A lengthy processing float reduces the availability of funds for the payee. The duration of the processing float is driven by the payee's internal processes, staff training, and the existence of any work backlog.

How to Reduce Processing Float

The use of a lockbox drastically reduces the amount of processing float, since checks are being mailed straight to a bank that will open the mail and cash all checks as expeditiously as possible. The reduction in processing float can offset the cost of the lockbox.