Benefits of using Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the traditional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers generally 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the information back to their customer. Because banks are processing checks and remittance this decreases the customers 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 amount 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 business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox can be fairly expensive . Banks typicallyearn a monthly fee as well as a per line rate connected tohandling payment remittance detail . check here

Lockboxes can contain security concerns . The standard bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced service provider . The data from the lockbox gives you all required elements to generate a fraudulent check .

Lockboxes don’t tie into your accounting program . Bank lockboxes process the payments and remittance information and thensend you the information . Your personnel still must key in that information into your ERP to clear the cash .

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting to pay their clients 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 a cost effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is to lowercost per transaction and supply an Accounts Receivable automation tool to letorganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple 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 get payment information . The AR Lockbox provides you with one destination to hold All of your incoming electronic payments produced for faster cash application .
Removes mail float
Mail float is a term for the time needed 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 swiftly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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