Advantages for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the traditional bank lockbox's life has been used for capturing 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 method.

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

Bank lockboxes are purposefully placed in a central location to reduce 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 customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The price of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large amount of checks over time can be expensive with a lockbox.

Today, we see a big change with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 is often rather costly . Banks typicallyacquire a monthly rate as well as a per line fee related tohandling payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still takes a decent amount 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 contractor . The information from the lockbox gives you all necessary components to make a fraudulent check .

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

Commercial Bank Lockboxes Are more info Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose businesses in a cost effective scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is usually to decreasepricing per transaction and supply an Accounts Receivable automation tool to helporganizations to QUICKLY clear cash and improve use of your working capital .

Simple payment trail
It is easy to track incoming ePayments from one location. website Rather than flipping through remittance emails or going to the vendor portal to get check here payment information . The AR Lockbox provides you with a single location to house All of your incoming electronic payments produced for swifter cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments embracing FinTech Lockboxes with an essential focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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