Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Big offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically leverage 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 business’ 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 productivity. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually fairly high priced . Banks normallyacquire a monthly fee in addition to a per line fee associated withprocessing payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an here outsourced service provider . The data from the lockbox can provide all vital elements to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Creating problems for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and preferring 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 businesses have bridged the gap to aidthose organizations in a cost effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation application to allowbusinesses to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox provides you with a single place to house All of your incoming electronic payments made for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time required 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 rapidly turning into a productof the past . The rise in electronic payments embracing FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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