Aspects of AR Automation

accounts receivable automation

Are you familiar with the benefits 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 a lot of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Big offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients basically leverage 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 company’s Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the data back to their client. 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 huge number of checks over time can be pricey with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



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

Lockboxes can include security issues . The standard bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced contractor . The information from the lockbox can provide all necessary elements to produce a fraudulent check .

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

Standard Bank 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 popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose organizations in a cost effective scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation application to allowbusinesses to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from more info one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you a single spot for a house ALL 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 by means of the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a primary focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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