Advantages of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Clients generally 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 customer. 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 cost. 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.

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually fairly costly . Banks typicallyacquire a monthly rate along with a per line rate connected withhandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The information from the lockbox provides all necessary elements to here make a fraudulent check .

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

Standard Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Organizations 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 producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in a cost effective scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox will be to reducepricing per transaction and provide an Accounts Receivable automation program to allowcompanies to QUICKLY clear cash and improve use of your working capital .

Simple payment trail
It is simple to track incoming ePayments in one place. Instead of flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox gives you a single place to house ALL 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 increase in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *