Advantages of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Big offered this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce 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 information back to their client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a huge shift with Accounts Payable Departments paying electronically. This shift to ePayments has elevated 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 rather high priced . Banks normallyearn a monthly rate along with a per line rate connected withhandling payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still takes a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The details from the lockbox gives you all needed elements to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing check here a predicament for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and deciding to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose corporations in a cost effective scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to lowerpricing per transaction and produce an Accounts Receivable automation program to permitorganizations to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox gives you one place to house All of your incoming electronic payments created for quicker 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 via the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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