Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life 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 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 assists 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 customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a big 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.

Pitfalls of a Traditional Bank Lockbox



The lockbox often is somewhat expensive . Banks generallyearn a monthly rate as well as a per line fee linked tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still takes a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all crucial elements to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing issues for your more info 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 producing an increase more info in email remittance . FinTech solution companies have bridged the gap to aidthose firms in a cost efficient scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox will be to reducefees per transaction and provide an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming get more info ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox gives you one place to hold ALL your incoming electronic payments created for more rapid cash application .
Gets rid of 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 rapidly becoming a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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