Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Big offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Customers generally leverage 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 company’s 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 productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be pricey with a lockbox.

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

Disadvantages of a Traditional Bank Lockbox



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

Lockboxes may contain security issues . The standard bank lockbox still requires a here decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced service provider . The data from the lockbox can provide all essential elements to produce a fraudulent check .

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

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

Rewards of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox would be to decreasepricing per transaction and supply an Accounts Receivable automation tool to letorganizations to rapidly 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 going to the vendor portal to download and read payment data . The AR Lockbox provides you with one location to hold All of your incoming electronic payments created for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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