Great things about AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions streamlining 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 productivity. The cost of the bank lockbox is typically a monthly fee 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 big change with Accounts Payable Departments paying electronically. This change 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 often is relatively costly . Banks generallyacquire a monthly fee in addition to a per line fee associated withprocessing payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The information from the lockbox can provide all needed components to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to remove manual task and opting to pay their customers 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 assistthose businesses in a cost effective scalable option get more info for automating Accounts website Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to lowercost per transaction and produce an Accounts Receivable automation application to alloworganizations to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments made for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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