Important things about AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients generally 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 receive the paper check, process it along with the remittance data and send the information back to their customer. 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 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 shift 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.

Disadvantages of a Traditional Bank Lockbox



The lockbox is usually relatively high priced . Banks commonlyearn a monthly rate as well as a per line fee linked toprocessing payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still requires a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced contractor . The data from the lockbox gives you all crucial components to generate a fraudulent check .

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

Standard Bank Lockboxes Are Creating problems for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual process and deciding to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose corporations in an economical scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is to reducecost per transaction and provide an Accounts Receivable automation tool to alloworganizations to rapidly clear cash and facilitate access check here to 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 download payment data . The AR Lockbox provides you with a single place to hold All of your incoming electronic payments meant for faster cash application .
Eliminates mail float
Mail float is a term for the time required 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 swiftly becoming a thingof the past . The increasing amount of electronic payments using FinTech Lockboxes with a significant focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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