Features of AR Automation

accounts receivable automation

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

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 benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Customers basically 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 customers A/R workforce and increases their efficiency. The cost 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 drastic change with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox can be somewhat costly . Banks typicallyearn a monthly rate in addition website to a per line rate connected withhandling payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still takes a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The information from the lockbox gives you all crucial elements to make a fraudulent check .

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

Commercial Bank Lockboxes Are Creating issues for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to servethose organizations in a cost here effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox is to reducefees per transaction and produce an Accounts Receivable automation application to letcompanies to rapidly clear cash and facilitate access read more to your working capital .

Simple payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one destination to hold ALL your incoming electronic payments produced for speedier cash application .
Eliminates mail float
Mail float is a term for the time required for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The increase in electronic payments choosing FinTech Lockboxes with a primary focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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