Aspects of AR Automation

accounts receivable automation

Do you know 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 utilized for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Customers basically 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 data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks usuallyearn a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The information from the lockbox provides all required elements to create a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process the payments and remittance information and thensend you the information . Your team still must input that information into your ERP to clear the cash .

Traditional Bank Lockboxes Are Creating issues for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to assistthose companies in a cost effective scalable option for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech ar lockbox Lockbox is to lowerfees per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and facilitate 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 download payment information . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments made for speedier 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 from the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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