Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of company transactions streamlining 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 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 customer. Because banks are processing checks and remittance this decreases the customers 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 cost. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a big 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.

Pitfalls of a Traditional Bank Lockbox



The lockbox is usually somewhat expensive . Banks commonlyacquire a monthly fee along with a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security issues . The traditional 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 service provider . The information from the lockbox provides all necessary elements to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting to pay their get more info customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose businesses in a cost effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is to decreasepricing per transaction and supply an Accounts Receivable automation program to permitorganizations to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments made for speedier cash application .
Gets rid of 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 increase in B2B payments electronically , mail float is quickly becoming a thingof the past . The increasing amount of electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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