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 company Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and a lot of the conventional bank lockbox's life has been used for processing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of company transactions simplifying 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 decrease mail delivery time, which also assists with lowering the business’ 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 efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large amount of checks over time can be pricey with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



The lockbox often is relatively high priced . Banks normallyearn a monthly fee along with a per line rate associated withprocessing payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative read more employees who are a novice to the financial institution or an outsourced contractor . The data from the lockbox can provide all required elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to eradicate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose corporations in a cost efficient scalable option for automating Accounts Receivable . website

Features of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox would be to decreasefees per transaction and produce an Accounts Receivable automation program to helpcompanies to QUICKLY clear cash and improve access to your working capital .

Easy payment trail
You can easily track incoming ePayments in one check here place. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to house ALL your incoming electronic payments created for more rapid cash application .
Removes mail float
Mail float is a term for the time required for a check to travel from the payer to the payee via the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a productof the past . The rise in electronic payments adopting FinTech Lockboxes with a primary focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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