Great things about AR Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also helps with lowering the company’s Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the information back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a big change with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Disadvantages of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks generallyearn a monthly rate as well as a per line rate linked toprocessing payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still takes a decent amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the bank or an outsourced contractor . The data from the lockbox can provide all crucial components to create a fraudulent check .

Lockboxes don’t connect into your accounting system . Bank lockboxes process the payments and remittance data and thenforward you the information . Your organization still must key here in that information into your ERP to clear the cash .

Traditional Bank Lockboxes Are Creating problems for your get more info Customers' AP Department . Organizations are modernizing their AP Department to remove manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to aidthose corporations in an economical scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation program to permitorganizations to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox gives you one spot for a hold ALL your incoming electronic payments created for swifter cash application .
Eliminates mail float
Mail float is get more info a term for the time required for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with a major focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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