Great things about Accounts Receivable Automation

accounts receivable automation

Are you familiar with the benefits 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 conventional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Big 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 purposefully placed in a central location to decrease mail delivery time, which also helps with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 typically a monthly fee along with a per line remittance data processing cost. 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 shift to ePayments has elevated the FinTech industry 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 typicallyearn a monthly rate as well as a per line rate connected toprocessing payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel more info who are new to the financial institution or an outsourced contractor . The information from the lockbox gives you all needed elements to produce 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 input that data into your ERP to clear the cash .

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations 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 preferred methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to decreasefees per transaction and supply an Accounts Receivable automation application to helporganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox get more info provides you with a single destination to house ALL your incoming electronic payments produced for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The increase in electronic payments choosing FinTech Lockboxes website with an essential focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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