Advantages of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the conventional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients 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 helps 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 efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge amount 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 revolutionized 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 is usually relatively costly . Banks commonlyacquire a monthly rate along with a per line rate linked tohandling payment remittance detail .

Lockboxes can contain security concerns . The check here 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 employees who are new to the bank or an outsourced contractor . The data from the lockbox can provide all needed components to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department . Companies are modernizing their AP Department to remove manual process and preferring to pay their clients 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 assistthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox would be to lowerfees per transaction and supply an Accounts Receivable automation tool to letbusinesses to rapidly here clear cash and improve access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single destination to house ALL your incoming electronic payments created for quicker 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 through the postal service . With the increase in B2B payments electronically , mail float is quickly becoming a productof the past . The increasing amount of electronic payments adopting 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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