Great things about AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Customers basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also helps 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 customers A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks usuallyacquire a monthly rate as well as a per line rate linked tohandling payment website remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all necessary components to create a fraudulent check .

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

Standard Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase click here in email remittance . FinTech solution companies have bridged the gap to helpthose companies in a cost efficient scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech read more Lockbox is usually to decreasecost per transaction and produce an Accounts Receivable automation application to permitcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one place to hold ALL your incoming electronic payments meant for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *