Advantages for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Customers basically leverage 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 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 clients A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Disadvantages of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks typicallyearn a monthly fee in addition to a per line fee related toprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still requires a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the financial institution or an outsourced service provider . The data from the lockbox can provide all necessary components to make a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process the payments and remittance data and thensend you the information . click here Your personnel still must enter that data into your ERP to clear the cash .

Commercial Bank Lockboxes Are Creating problems 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 desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose firms in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox will be to decreasecost per transaction and produce an Accounts Receivable automation application to alloworganizations to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails accounts receivable solutions or heading to the vendor portal to download payment information . The AR Lockbox gives you a single location to hold All of your incoming electronic payments made for speedier 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 via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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