Aspects of AR Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by company 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 used for capturing payment data associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients basically 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 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 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 fee. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a drastic shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 is often somewhat high priced . Banks usuallyacquire a monthly fee in addition to a per line fee connected withprocessing payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced contractor . The details from the lockbox gives you all required elements to create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose businesses in an economical scalable alternative for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to lowerfees per transaction and supply an Accounts Receivable automation application to letorganizations to rapidly clear cash and improve access to your working capital .

Simple 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 get payment information . The AR Lockbox gives you one place to hold All of your incoming electronic payments made for quicker cash application .
Eliminates mail float
Mail float is a term for the time required for here 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 turning into a productof the past . The rise in electronic payments adopting FinTech Lockboxes with a major focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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