Attributes of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's lifespan has been utilized 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 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 company’s Days Sales Outstanding (DSO). Banks get 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 clients A/R workforce and increases their efficiency. The cost of the bank lockbox is usually 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 huge change with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Drawbacks of a Traditional Bank Lockbox



The lockbox could be relatively high priced . Banks usuallyacquire a monthly fee as well as a per line fee connected withprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the bank or an outsourced service provider . The information from the lockbox provides all required components to create a fraudulent check .

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

Traditional Bank Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to eradicate manual task and opting to pay get more info 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 businesses in a cost effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to reducepricing per transaction and supply an Accounts Receivable automation program to helpcompanies to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments produced 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 from the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a major focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *