Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Customers generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully 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 customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. 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 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.

Pitfalls of a Traditional Bank Lockbox



The lockbox often is somewhat costly . Banks usuallyearn a monthly rate as well as a per line fee connected tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The details from the lockbox provides all needed elements to generate a fraudulent check .

Lockboxes don’t tie into your accounting program . Bank lockboxes process the payments and remittance data thensend you accounts receivable solutions the information . Your team still must enter that information into your ERP to clear the cash .

Traditional Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task 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 businesses have bridged the gap to helpthose businesses in an economical scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation application to allowbusinesses to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you a single place to house All of your incoming electronic payments meant for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time required 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 swiftly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with an essential focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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