Best thing about AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Commercial banks provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients generally leverage 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 company’s 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 big shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox can be relatively high priced . Banks commonlyearn a monthly rate in addition to a per line rate associated withhandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The data from the lockbox gives you all necessary components to make a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process the payments and remittance information and thensend you the information . Your organization 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 process and opting to pay their clients more info electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose firms in a cost efficient scalable option for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is to reducecost per transaction and provide an Accounts Receivable automation tool to allowcompanies to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with a single spot for a hold All of your incoming electronic payments produced for faster cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by means of the postal service . With the increase in B2B payments check here electronically , mail float is swiftly turning into a productof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a major focus on the price reduction more info and speed in which you clear cash and apply it to your working capital .


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