Important things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the traditional bank lockbox's lifespan has been used for processing payment data associated with payments made by check. Commercial banks offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients generally use 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 business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the information back to their client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly cost 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 drastic shift with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox could be fairly expensive . Banks generallyearn a monthly fee along with a per line rate associated withprocessing 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 staff who are a novice to the financial institution or an outsourced contractor . The data from the lockbox can provide all essential components to create a fraudulent check .

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

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

Advantages of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to lowercost per transaction and supply an Accounts Receivable automation program to allowcompanies to QUICKLY clear cash and improve use of your working capital .

Simple payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox gives you one spot for a house ALL your incoming electronic payments meant for more rapid cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with a significant focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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