Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions streamlining 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 helps with lowering the business’ Days Sales Outstanding (DSO). Banks get 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 customers 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 cost. 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 shift to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Pitfalls of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks typicallyearn a monthly rate in addition to a per line fee connected tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The data from the lockbox gives you all required elements to generate a fraudulent check . read more

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

Commercial Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and preferring 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 assistthose corporations in a cost effective scalable option for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox would be to lowerpricing per transaction and supply an Accounts Receivable automation program to alloworganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with a single spot for a hold ALL your incoming electronic payments produced for quicker cash application .
Gets rid of 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 rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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