Benefits of Accounts Receivable 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 a while now and a lot of the conventional bank lockbox's lifespan has been utilized for processing payment data associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

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

Bank lockboxes are strategically 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 customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be costly 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.

Downsides of a Traditional Bank Lockbox



The lockbox is often relatively high priced . Banks generallyearn a monthly fee in addition to a per line rate associated withhandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still requires a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The information from the lockbox provides all required components to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing issues for your Customers' AP Department . Corporations are modernizing their AP Department to eradicate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to assistthose firms in an economical scalable option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox is to reducepricing per transaction and supply an Accounts Receivable automation tool to permitbusinesses to rapidly clear cash and improve access to your working capital .

Simple payment trail
It is simple to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to download get more info payment information . The AR Lockbox gives you a single destination to hold ALL your incoming electronic payments created for quicker cash application .
Gets rid of 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 productof the past . The rise in electronic payments using FinTech Lockboxes with a primary focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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