Advantages for AR Automation

accounts receivable automation

Are you aware of the advantages of accounts receivable automation? Conventionally, 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 traditional bank lockbox's life has been used for processing payment data associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

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

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also assists with lowering the company’s 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 price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



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

Lockboxes may include security issues . The traditional bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced contractor . The details from the lockbox can provide all vital elements to produce a fraudulent check .

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

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

Features of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to lowerpricing per transaction and provide an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming read more ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with a single place to hold ALL your incoming electronic payments produced for quicker cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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