Aspects 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 a while now and much of the traditional bank lockbox's life has been used for processing payment data associated with payments made by check. Big provided this service to improve effectiveness and flow of business transactions streamlining 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 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 clients A/R workforce and increases their productivity. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. 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.

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually fairly expensive . Banks generallyearn a monthly rate as well as a per line rate related tohandling payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a decent measure 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 service provider . The data from the lockbox provides all essential elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Businesses are modernizing their AP more info Department to get rid of manual process and deciding 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 servethose corporations in an economical scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox would be to decreasepricing per transaction and supply an Accounts Receivable automation tool to permitbusinesses to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments meant for swifter 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 rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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