Benefits 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 business Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients basically use 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 assists with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 customers 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 amount of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox could be relatively expensive . Banks typicallyearn a monthly rate along with a per line fee connected withprocessing payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still takes 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 financial institution or an outsourced service provider . The data from the lockbox gives you all essential elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose businesses in an economical scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is usually to reducefees per transaction and provide an Accounts Receivable automation program to alloworganizations to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one place. read more Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox gives you one place 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 travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The increase in electronic payments choosing FinTech Lockboxes with an essential focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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