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 traditional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients generally leverage 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 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 cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a large number of checks over time can be pricey with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks commonlyacquire a monthly fee as well as a per line fee associated withprocessing payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced service provider . The data from the lockbox can provide all necessary components to produce a fraudulent check .

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

Standard Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance read more . 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 is to lowerfees per transaction and provide an Accounts Receivable automation application to allowcompanies to rapidly clear cash and improve use of your working capital .

Simple 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 get payment information . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments click here produced for quicker cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go 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 rise in electronic payments choosing more info FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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