Benefits of using Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's life has been used for processing payment data associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of business transactions simplifying 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 helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the data back to their customer. 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 cost 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 drastic change with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Weaknesses of a Traditional Bank Lockbox



The lockbox is usually fairly high priced . Banks commonlyacquire a monthly fee in addition to a per line rate connected withprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an get more info outsourced contractor . The information from the lockbox provides all essential components to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating issues for your Customers' AP Department . Companies are modernizing their AP Department to remove manual process and deciding to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose corporations in a cost efficient check here scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation application to letorganizations to rapidly clear cash and facilitate use of your working capital .

Easy payment trail
You can easily track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single spot for a hold All of your incoming electronic payments produced for swifter cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a thingof the past . The improvement in electronic payments embracing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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