Advantages of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been used for processing payment information 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 helps with lowering the company’s Days Sales Outstanding (DSO). Banks receive 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 clients A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a drastic shift with Accounts Payable Departments paying electronically. This shift to ePayments has elevated 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 is usually rather expensive . Banks generallyearn a monthly fee along with a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced contractor . The information from the lockbox can provide all required elements to produce a fraudulent check .

Lockboxes don’t tie into your accounting program . Bank lockboxes process your payments and remittance data thensend you the information . Your personnel 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 eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have here bridged the gap to helpthose businesses in an economical scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to decreasepricing per transaction and provide an Accounts Receivable automation program to alloworganizations to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with one destination to hold ALL your incoming electronic payments created for faster 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 from the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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