Great things about AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional 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 method.

Clients generally use 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 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 customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large number 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.

Weaknesses of a Traditional Bank Lockbox



The lockbox can be rather costly . Banks generallyearn a monthly fee as well as a per line rate linked toprocessing payment remittance detail .

Lockboxes can contain security issues . The traditional bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The data from the lockbox can provide all necessary 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 a predicament for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose businesses in an economical scalable option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to decreasefees per transaction and provide an Accounts Receivable automation application to letorganizations to rapidly clear cash and facilitate use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single spot for a hold All of your incoming electronic payments meant for faster 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 means of the postal service . With click here the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a major focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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