Best things about Accounts Receivable Automation

accounts receivable automation

Do you know 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 a lot of the traditional bank lockbox's life has been utilized for processing payment data associated with payments made by check. Big offered this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Clients 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 company’s Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the information back to their client. Because banks are processing checks and remittance this decreases the customers 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 huge number of checks over time can be expensive with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox can be somewhat expensive . Banks usuallyearn a monthly fee in addition to a per line fee linked tohandling payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes 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 service provider . The data from the lockbox provides all ar lockbox necessary elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual process and deciding 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 businesses have bridged the gap to helpthose companies in an economical scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is usually to decreasecost per transaction and supply an Accounts Receivable automation application to allowcompanies to rapidly clear cash and improve access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. website Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with a single destination to house ALL your incoming electronic payments made for quicker cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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