Great things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients basically leverage 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks get 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 efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be costly with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually rather expensive . Banks usuallyacquire a monthly rate as well as a per line fee connected toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still takes a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced contractor . The data from the lockbox provides all needed elements to produce a fraudulent check .

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

Traditional Bank Lockboxes Are Creating issues for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose companies in a cost effective scalable alternative for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox will be to lowerpricing per transaction and produce an Accounts Receivable automation application to allowcompanies to rapidly clear cash and facilitate use of your working capital .

Easy payment trail
It here is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox gives you a single place to hold ALL your incoming electronic payments produced for more rapid cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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