Benefits of using Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much 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 company 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 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 data back to their customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The cost 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 huge change with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized 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 can be rather costly . Banks usuallyearn a monthly rate along with a per line rate linked toprocessing payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The data from the lockbox provides all required components to create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose companies in a cost efficient scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is to lowerfees per transaction and supply an more info Accounts Receivable automation application to letbusinesses to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single spot for a hold ALL get more info your incoming electronic payments created for more rapid cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with an essential focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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