Advantages for AR Automation

accounts receivable automation

Do you know the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by organization 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 information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

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 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 clients A/R workforce and increases their productivity. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a huge shift 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.

Pitfalls of a Traditional Bank Lockbox



The lockbox can be somewhat high priced . Banks usuallyacquire a monthly rate along with a per line fee related tohandling payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The details from the lockbox can provide all necessary components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred here methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to helpthose companies in a cost efficient scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox will be to lowerfees per transaction and supply an Accounts Receivable automation tool to allowcompanies to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance website emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with one place to hold ALL your incoming electronic payments made for here faster cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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