Aspects of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's lifespan has been utilized for processing payment data associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients generally leverage 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 company’s 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 customers A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks usuallyacquire a monthly rate along with a per line rate connected tohandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a fair measure of manual re-keying data . With the majority of manual website data entry attendance being entry level-administrative staff who are a novice to the bank or an outsourced contractor . The details from the lockbox can provide all necessary elements to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and opting to pay their customers electronically via ACH , here Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose organizations in a cost effective scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox will be to lowerfees per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox provides you with a single destination to hold All of your incoming electronic payments created for faster cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increase in electronic payments embracing FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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