Best things about AR Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data back to their customer. Because banks are processing checks and remittance this decreases the clients 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 fee. To process a large amount of checks over time can be pricey with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



The lockbox could be fairly expensive . Banks usuallyearn a monthly rate in addition to a per line fee linked tohandling payment remittance detail .

Lockboxes can contain security concerns . The standard bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced service provider . The details from the lockbox gives accounts receivable automation you all required elements to produce a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process your payments and remittance information and thensend you the information . Your personnel still must input that data into your ERP to clear the cash .

Commercial Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to remove manual process and deciding to pay their customers 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 servethose businesses in a cost effective scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox will be to decreasepricing per transaction and provide an Accounts Receivable automation application to permitorganizations to rapidly clear cash and improve use of your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single spot for a hold All of your incoming electronic payments made for swifter cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a productof the past . The rise in electronic payments using FinTech Lockboxes with an essential focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *