Benefits of Accounts Receivable Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by company Accounts Receivable departments to increase expediency.

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

Customers basically 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 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 efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a huge shift 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks usuallyacquire a monthly rate as well as a per line rate related tohandling payment remittance detail .

Lockboxes can contain security website concerns . The traditional bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced contractor . The information from the lockbox provides all essential elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department . Corporations 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 check here email remittance . FinTech solution companies have bridged the gap to assistthose businesses in a cost effective scalable solution ar lockbox for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is to lowerfees per transaction and supply an Accounts Receivable automation tool to helpbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single spot for a hold ALL your incoming electronic payments made for more rapid cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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