Benefits of Accounts Receivable Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by business 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 utilized for processing payment data associated with payments made by check. Big offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically use 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox is often fairly expensive . Banks usuallyearn a monthly fee along with a per line rate connected tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The details from the lockbox gives you all required components to create a fraudulent check .

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

Standard Bank Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to get check here rid of manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is to lowerfees per transaction and provide an Accounts Receivable automation program to letbusinesses to rapidly clear cash and improve use of your working capital .

Simple payment trail
You can easily 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 swifter cash application . click here
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee from 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 using FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your check here working capital .


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