Best things about AR Automation

accounts receivable automation

Are you aware of the benefits of accounts receivable automation? Conventionally, 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 conventional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Big offered this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Customers generally 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks get 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 price of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

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

Disadvantages of a Traditional Bank Lockbox



The lockbox often is relatively costly . Banks generallyacquire a monthly fee in addition to a per line rate connected withhandling payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still requires a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the financial institution or an outsourced contractor . The information from the lockbox provides all necessary components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred 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 option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox will be to lowerpricing per transaction and provide an Accounts Receivable automation program to letcompanies to QUICKLY clear cash and check here improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments made for swifter 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 increase in B2B payments electronically , mail accounts receivable solutions float is rapidly turning into a productof the past . The increasing amount of electronic payments using FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *