Best things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the traditional bank lockbox's life has been used for processing payment data associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers generally leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to reduce mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive 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 productivity. The price of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. 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 trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox often is rather expensive . Banks usuallyacquire a monthly rate along with a per line rate linked tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced contractor . The data from the lockbox gives you all essential elements to create a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Businesses are modernizing their AP Department to remove manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose corporations in a cost effective scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to reducefees per transaction and supply an Accounts Receivable automation program to permitorganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal more info to download and read payment data . The AR Lockbox provides you with a single destination to hold All of your incoming electronic payments created for quicker cash application .
Gets rid of 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 swiftly becoming a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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