Aspects of AR Automation

accounts receivable automation

Are you familiar with the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by company 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 information associated with payments made by check. Commercial banks provided this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers 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 productivity. The price 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 pricey with a lockbox.

Today, we see a big shift 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox can be somewhat high priced . Banks usuallyearn a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still requires a fair level of manual re-keying data read more . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced contractor . The information from the lockbox can provide all vital components to produce a fraudulent check .

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

Traditional Bank Lockboxes Are Causing issues for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and deciding to pay check here their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


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

Easy payment trail
You can easily track get more info incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox provides you with one spot for a hold ALL your incoming electronic payments meant for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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