Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers generally leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also helps with lowering the business’ 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 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 fee. To process a huge number of checks over time can be expensive with a lockbox.

Today, we see a drastic change 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.

Disadvantages of a Traditional Bank Lockbox



The lockbox often is rather high priced . Banks normallyacquire a monthly rate in addition to a per line fee related tohandling payment remittance detail .

Lockboxes can contain security issues . The traditional bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being accounts receivable automation entry level-administrative workers who are new read more to the financial institution or an outsourced contractor . accounts receivable solutions The information from the lockbox gives you all needed elements to produce a fraudulent check .

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

Financial Institution Lockboxes Are Creating problems for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual process 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 companies have bridged the gap to assistthose organizations in an economical scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox is usually to lowerpricing per transaction and provide an Accounts Receivable automation tool to permitbusinesses to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one location. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox gives you a single place to hold All of your incoming electronic payments made for faster cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a significant focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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