Benefits of Accounts Receivable 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 expediency.

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients basically leverage 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 business’ 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 clients 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 cost. To process a huge number of checks over time can be pricey with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 is often rather expensive . Banks generallyacquire a monthly rate along with a per line fee related tohandling payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still requires a decent amount 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 required elements to produce a fraudulent check .

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

Traditional Bank Lockboxes Are Creating problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and preferring to pay their clients 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 website assistthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to lowerfees per transaction and produce an Accounts Receivable automation program to permitbusinesses to rapidly clear cash and facilitate access to your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Instead of flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with one place to hold All of your incoming electronic payments made for swifter cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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