Advantages 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 capturing payment information associated with payments made by check. Big provided this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers 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 helps with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox can be fairly high priced . Banks typicallyearn a monthly fee in addition to a per line rate associated withprocessing payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced contractor . The information from the lockbox can provide all essential elements to make a fraudulent check .

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

Financial Institution Lockboxes Are Creating a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task read more and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose firms in a cost efficient scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is to decreasefees per transaction and produce an Accounts Receivable automation tool to helpcompanies to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox read more provides you with one place to hold All of your incoming electronic payments meant for more rapid cash application click here .
Eliminates mail float
Mail float is a term for the time required 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 quickly turning into a productof the past . The rise in electronic payments adopting FinTech Lockboxes with a significant focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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