Aspects of AR Automation

accounts receivable automation

Are you familiar with 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 a while now and much of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Big offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically leverage 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 assists with lowering the business’ 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 customers A/R workforce and increases their efficiency. The cost 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 pricey with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



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

Lockboxes may include security concerns . The standard bank lockbox still takes a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the financial institution or an outsourced contractor . The information from the lockbox can provide all needed elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose firms in an economical scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox is to reducepricing per transaction and produce an Accounts Receivable automation application to letorganizations to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with one place to hold ALL your incoming electronic payments read more made for speedier cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with a major focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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