Benefits of AR Automation

accounts receivable automation

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

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

Clients generally leverage 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 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 typically a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks usuallyacquire a monthly rate along with a per line rate linked check here toprocessing payment remittance detail .

Lockboxes can contain 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 workers who are a novice to the financial institution or an outsourced service provider . The data from the lockbox provides all required elements to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating a predicament for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in click here email remittance . FinTech solution companies have bridged the gap to aidthose firms in an economical scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is usually to decreasecost per transaction and supply an Accounts Receivable automation application to letorganizations to QUICKLY clear cash and improve use of your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox gives you one destination to house All of your incoming electronic payments produced for speedier 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 via the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a primary focus on the cost reduction and speed at here which you clear cash and apply it to your working capital .


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