Great things about AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Commercial banks 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 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 productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a drastic 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks normallyacquire a monthly fee in addition to a per line fee connected tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The information from the lockbox provides all necessary elements to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing problems for your Customers' AP Department . Companies are modernizing their AP Department to remove manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose companies in an economical scalable alternative for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox would be to lowercost per transaction and produce an Accounts Receivable automation tool to letcompanies to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming check here ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single place to house All of your incoming electronic payments made for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The increasing amount of electronic payments adopting FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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