Best things about AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also assists with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 fee 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 big shift with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox can be relatively costly . Banks generallyearn a monthly rate in addition to a per line rate related tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the financial institution or an outsourced contractor . The data from the lockbox can provide all essential elements to generate a fraudulent check .

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

Traditional Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual process here and opting to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose firms in a cost effective scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to lowerpricing per transaction and supply an Accounts Receivable automation application to helpbusinesses to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox provides you with one destination to house ALL your incoming electronic payments meant for more rapid cash application .
Eliminates 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 swiftly becoming a thingof the past . The rise in electronic payments adopting FinTech Lockboxes with a major focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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