Benefits from AR Automation

accounts receivable automation

Do you know 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 conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients basically 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the information back to their client. 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 typically a monthly fee 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 huge shift with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized 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 often is fairly costly . Banks commonlyacquire a monthly rate as well as a per line rate related toprocessing 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 workers who are new to the bank or an outsourced service provider . The data from the lockbox can provide all required elements to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing issues for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged get more info the gap to assistthose corporations in a cost efficient scalable option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox will be to reducefees per transaction and produce an Accounts Receivable automation program to permitbusinesses to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with a single location to house ALL your incoming electronic payments produced 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 rise in B2B payments electronically , mail float is swiftly turning into a productof the past . The rise in electronic payments using FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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