Best things about Accounts Receivable Automation

accounts receivable automation

Are you familiar with 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 many years and a lot of the conventional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Big provided this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients generally 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 helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive 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 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 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 industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox often is relatively expensive . Banks commonlyacquire a monthly fee as well as a per line fee related tohandling payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still takes a decent amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The information from the lockbox provides all necessary components to generate a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process your payments and remittance data thenforward you the information . Your team still must key in that data into accounts receivable solutions your ERP to clear the cash .

Standard Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Companies are modernizing their AP Department to remove manual task and opting to pay their clients 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 businesses in an economical scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox will be to decreasefees per transaction and supply an Accounts Receivable automation tool to permitorganizations to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox gives you one place to house All of 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 go from the payer to the payee check here from the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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