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 efficiency.

Lockboxes have been around for decades and a lot of the traditional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Big offered this amenity to improve effectiveness and flow of business transactions simplifying 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 business’ Days Sales Outstanding (DSO). Banks receive 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 cost along with a per line remittance data processing fee. To process a huge number of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox often is relatively high priced . Banks typicallyacquire a monthly fee in addition to a per line fee linked tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a fair amount 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 service provider . The data from the lockbox gives you all crucial components to create a fraudulent check .

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

Financial Institution Lockboxes Are Causing problems for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to aidthose corporations in a cost effective scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox will be to decreasecost per transaction and produce an Accounts Receivable automation application to permitorganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox gives you one destination to house ALL your incoming electronic payments produced for faster 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 via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The improvement in electronic payments choosing FinTech Lockboxes with a primary focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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