Advantages for Accounts Receivable Automation

accounts receivable automation

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

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

Clients 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 data back to their client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. 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 costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox is often somewhat expensive . Banks generallyearn a monthly rate along with a per line fee linked toprocessing payment remittance detail .

Lockboxes may more info include security issues . 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 employees who are new to the bank or an outsourced service provider . The details from the lockbox gives you all vital components to make a fraudulent check .

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

Commercial Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose corporations in a cost effective scalable option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to lowercost per transaction and provide an Accounts Receivable automation tool to permitcompanies to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one destination to hold ALL your incoming electronic payments meant for faster cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee from 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 embracing FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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