Best thing about AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Commercial banks provided this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients basically 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 business’ Days Sales Outstanding (DSO). Banks receive 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 customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large amount of checks over time can be expensive with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox could be rather costly . Banks normallyearn a monthly rate as well as a per line fee connected withprocessing payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The details from the lockbox can provide all needed components to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing problems for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to assistthose companies in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox would be to lowerfees per transaction and supply an Accounts Receivable automation program to letbusinesses to rapidly clear cash and improve use of your working capital .

Simple payment trail
You can easily track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments made for swifter cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant get more info focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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