Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Commercial banks offered this amenity to improve effectiveness and flow of company 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 helps with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 amount of checks over time can be pricey with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks normallyearn a monthly fee in addition to a website per line rate related toprocessing payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still takes a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced service provider . The information from the lockbox gives you all necessary components to produce a fraudulent check .

Lockboxes don’t connect into your accounting system . Bank lockboxes process the payments and remittance information thenforward read more you the information . Your organization still must key in that data into your ERP to clear the cash .

Standard Bank Lockboxes Are Creating problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual process 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 helpthose companies in a cost efficient scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox will be to decreasecost per transaction and produce an Accounts Receivable automation program to alloworganizations to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox gives you one destination to house All of your incoming electronic payments meant for swifter cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the read more payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a primary focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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