Best thing about Accounts Receivable Automation

accounts receivable automation

Are you familiar with 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 decades and much of the traditional bank lockbox's life has been used for capturing payment data associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients generally leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also assists with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 clients A/R workforce and increases their productivity. The price of the bank lockbox is usually 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 shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Weaknesses of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks typicallyacquire a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security issues . The traditional bank lockbox still requires a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The data from the lockbox provides all needed components to create a fraudulent check .

Lockboxes website don’t tie into your accounting program . Bank lockboxes process your payments and remittance information and thensend you the information . Your organization still must input 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 eradicate manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to servethose organizations in an economical scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is usually to lowerpricing per transaction and provide an Accounts Receivable automation tool to allowcompanies to QUICKLY clear cash and improve access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single place to house ALL your incoming electronic payments created for faster 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 by means of the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a productof the past . The increasing amount of electronic payments adopting 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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