Great 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 business Accounts Receivable departments to increase efficiency.

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been utilized for processing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business 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 productivity. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

Today, we see a drastic shift 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox could be fairly high priced . Banks normallyacquire a monthly rate as well as a per line rate associated withprocessing payment remittance detail .

Lockboxes may include get more info security issues . The traditional bank lockbox still takes a fair level 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 accounts receivable solutions . The details from the lockbox can provide all essential components to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing problems for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose businesses in a cost efficient scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox would be to lowerpricing per transaction and produce an Accounts Receivable automation tool to allowbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox gives you a single more info place to house All of your incoming electronic payments produced 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 by means of the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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