Best thing about AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Big offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients basically leverage 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 assists with lowering the company’s Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data back to their client. 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 cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks generallyacquire a monthly fee as well as a more info per line rate connected toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires a fair amount 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 service provider . The details from the lockbox can provide all necessary elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to eradicate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose corporations in a cost efficient scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to reducecost per transaction and produce an Accounts Receivable automation application to helpbusinesses to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you one place to house All of your incoming electronic payments created for faster cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee via the postal service . With the increase in B2B payments electronically , mail float is quickly becoming a thingof the past . The increasing amount of electronic payments adopting FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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