Important things about AR Automation

accounts receivable automation

Are you aware of the benefits 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 a lot of the conventional bank lockbox's life has been used for processing payment information associated with payments made by check. Commercial banks offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers 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 business’ Days Sales Outstanding (DSO). Banks receive 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 productivity. The cost 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 pricey with a lockbox.

Today, we see a big shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized 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 somewhat high priced . Banks generallyacquire a monthly fee as well as a per line fee connected toprocessing payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the financial institution or an outsourced contractor . The information from the lockbox can provide all crucial elements to produce a fraudulent check .

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

Financial Institution Lockboxes Are Creating issues for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual task and deciding to pay their clients electronically via 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 aidthose corporations in a cost effective scalable option for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox ar automation solutions is usually to decreasecost per transaction and produce an Accounts Receivable automation application to permitcompanies to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments produced for swifter cash application .
Removes mail float
Mail float get more info is a term for the time needed for a check to travel from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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