Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been used for processing payment information associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients basically leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease 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 data back to their client. 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 fee. To process a huge number of checks over time can be costly with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is often relatively expensive . Banks usuallyacquire a monthly fee as well as a per line rate associated withhandling payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still takes a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The data from the lockbox gives you all needed elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Causing a Problem for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to servethose businesses in a cost effective scalable option for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox will be to reducecost per transaction and supply an Accounts Receivable automation program to permitbusinesses to rapidly clear cash and facilitate use of your working capital . get more info

Easy payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox provides you with one place to house ALL your incoming electronic payments meant for more rapid cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The increase in electronic payments using 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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