Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive 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 clients A/R workforce and increases their efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox can be fairly high priced . Banks typicallyearn a monthly fee in addition to a per line rate linked tohandling payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all necessary components to create a fraudulent check .

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

Commercial Bank Lockboxes Are Creating difficulty 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 desired methods of get more info ePayment are creating an increase in email remittance . FinTech solution businesses have bridged website the gap to supportthose corporations in an economical scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is usually to reducepricing per transaction and provide an Accounts Receivable automation tool to permitorganizations to QUICKLY clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single location to hold 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 go from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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