Great things about AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Big offered this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Clients basically use 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 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 clients A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a huge amount of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox often is rather high priced . Banks commonlyearn a monthly fee in addition to a per line rate related tohandling payment remittance detail .

Lockboxes can include 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 here level-administrative employees who are new to the bank or an outsourced contractor . The data from the lockbox provides all crucial elements to make a fraudulent check .

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

Standard Bank Lockboxes Are Creating problems for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose businesses in a cost efficient scalable option for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox will be to lowerpricing per transaction and produce an Accounts Receivable automation application to permitbusinesses to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox provides you with one location to hold All of your incoming electronic payments meant for quicker 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 from the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a productof the past . The increase in electronic payments adopting FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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