Features 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 decades and much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Commercial banks offered this amenity to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers basically 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 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 customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

Today, we see a big shift 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.

Disadvantages of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks typicallyearn a monthly rate along with a per line fee connected withhandling payment remittance detail .

Lockboxes can contain security issues . The traditional bank lockbox still takes a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced contractor . The details from the lockbox can provide all essential elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Creating issues for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and preferring to pay their clients electronically via website ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose firms in an economical scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox will be to decreasecost per transaction and produce an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with one spot for a house ALL your incoming electronic payments meant for quicker cash application .
Gets rid of mail float
Mail float is a term for the time required for a check check here to travel from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The increase in electronic payments using 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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