Advantages for Accounts Receivable Automation

accounts receivable automation

Are you familiar with the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

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

Bank lockboxes are purposefully placed in a central location to reduce 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 client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost 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 big change with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Drawbacks of a Traditional Bank Lockbox



The lockbox often is relatively high priced . Banks normallyearn a monthly rate in addition to a per line rate linked toprocessing payment remittance detail . get more info

Lockboxes can contain security issues . The standard bank lockbox still takes a decent amount of manual re-keying information . With the click here majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The data 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 and thensend you the information . Your team still must key in that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and deciding 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 companies have bridged the gap to helpthose companies in an economical scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox would be to lowerfees per transaction and produce an Accounts Receivable automation tool to helpbusinesses to rapidly clear cash and improve access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single location to house ALL your incoming electronic payments meant for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time needed for a accounts receivable solutions check to go from the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments adopting FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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