Benefits of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients basically leverage 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 company’s Days Sales Outstanding (DSO). Banks receive 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 clients 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 huge change with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Pitfalls of a Traditional Bank Lockbox



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

Lockboxes may contain security issues . The traditional bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced service provider . The details from the lockbox provides all needed elements to produce a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose businesses in a cost efficient scalable alternative for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is to decreasefees per transaction and produce an Accounts Receivable automation application to letbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Simple 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 payment data . The AR Lockbox provides you with one spot for a house ALL your incoming electronic payments produced for quicker cash application .
Removes 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 rise in B2B payments electronically , mail float is rapidly turning into a thingof the past . The increasing amount of electronic payments adopting FinTech Lockboxes with an click here essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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