Reasons for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients 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 data back to their client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox could be fairly high priced . Banks commonlyacquire a monthly fee in addition to a per line rate connected withhandling payment remittance detail .

Lockboxes may contain security concerns . The traditional 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 new to the financial institution or an outsourced contractor . The information from the lockbox can provide all necessary elements to generate a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process your payments get more info and remittance information and thenforward you the information . Your team still must enter that information into your ERP here to clear the cash .

Standard Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual task and preferring 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 supportthose corporations in an economical scalable option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is usually to lowerfees per transaction and provide an Accounts Receivable automation application to letbusinesses to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track click here incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single spot for a house All of your incoming electronic payments produced for speedier cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The increase 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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