Attributes of AR Automation

accounts receivable automation

Are you familiar with the benefits 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 traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream provided this benefit 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 strategically placed in a central location to reduce mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the information back to their client. 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 cost. To process a large number of checks over time can be pricey 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox is often fairly high priced . Banks commonlyearn a monthly rate along with a per line fee linked toprocessing payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced service provider get more info . The information from the lockbox gives you all needed components to generate 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 enter that data into your ERP to clear the cash .

Traditional Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose corporations in an economical scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main goal accounts receivable solutions of the FinTech Lockbox is usually to decreasecost per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments produced for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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