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Explain Accelerated Cash Collection.
This is another arrangement made by the company to accelerate cash collection. Under this arrangement the company hires a post office box at important collection centers. The customers are directed to make the payment directly to the lock box. The local bankers collect cheques from the lock box and deposit in the bank account. Bank informs the company about the details after crediting the cheques to the company’s account. This system reduces the postal float as well as bank float but at the same time it involves cost.
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