Benefits from Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Clients basically use 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 information 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 typically a monthly fee along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

Today, we see a big shift 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.

Drawbacks of a Traditional Bank Lockbox



The lockbox can be rather costly . Banks generallyearn a monthly rate along with a per line rate related tohandling payment remittance get more info detail .

Lockboxes may include security concerns . The traditional bank lockbox still requires a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all needed components to create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to aidthose companies in a cost effective scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is to reducecost per transaction and provide an Accounts Receivable automation program to allowcompanies to QUICKLY clear cash and facilitate use of your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with one destination to house All of your incoming electronic payments created for quicker cash application .
Gets rid of mail float
Mail float is a term for check here the time required for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments adopting FinTech Lockboxes with a significant focus on the price reduction and speed at which you clear cash and apply it to your working capital here .


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