Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been used for processing payment data associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions simplifying 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 reduce mail delivery time, which also helps with lowering the company’s Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data 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 typically a monthly cost 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 huge shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox could be rather costly . Banks commonlyacquire a monthly fee in addition to a per line rate connected tohandling payment remittance detail .

Lockboxes may include security concerns . get more info 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 provides all crucial elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating a predicament for your Customers' AP Department click here . Corporations are modernizing their AP Department to remove manual process and opting to pay their clients 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 assistthose 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 will be to decreasepricing per transaction and provide an Accounts Receivable automation application to allowcompanies to rapidly clear cash and improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one place to house All of your incoming electronic payments created 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 float is rapidly turning into a thingof the past . The improvement in electronic payments choosing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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