Best things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Big offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers generally 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 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 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 drastic shift with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Disadvantages of a Traditional Bank Lockbox



The lockbox can be somewhat costly . Banks commonlyearn a monthly fee along with a per line fee connected tohandling payment remittance detail .

Lockboxes may contain 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 personnel who are new to the bank or an outsourced service provider . The details from the lockbox gives you all required elements to generate a fraudulent check .

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

Standard Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These preferred website methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to servethose companies in an economical scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox would be to decreasefees per transaction and supply an Accounts Receivable automation application to permitbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
You can easily track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with a single location to house ALL your incoming electronic payments made for faster cash application .
Gets rid of 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 increase in B2B payments electronically , mail float is swiftly becoming a productof the past . The rise in electronic payments using FinTech Lockboxes with a primary focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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