Benefits from 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 expediency.

Lockboxes have been around for many years and a lot of the traditional bank lockbox's life has been used for processing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients generally 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 data back to their client. 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 usually a monthly fee along with a per line remittance data processing cost. To process a huge number of checks over time can be expensive with a lockbox.

Today, we see a big change 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually relatively expensive . Banks normallyearn a monthly fee in addition to a per line rate connected withhandling payment remittance detail .

Lockboxes may include security website issues . The standard 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 bank or an outsourced contractor . The information from the lockbox provides all essential elements to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and deciding 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 ar automation solutions bridged the gap to aidthose organizations in a cost efficient scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is usually to decreasecost per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single destination to house All of your incoming electronic payments created for speedier cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments embracing ar automation solutions FinTech Lockboxes with an essential focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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