Important things about Accounts Receivable Automation

accounts receivable automation

Are you familiar with the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase efficiency.

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Customers basically 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 company’s Days Sales Outstanding (DSO). Banks get 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 price of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

Today, we see a drastic shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Weaknesses of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks commonlyacquire a monthly rate as well as a per line rate linked tohandling payment remittance detail .

Lockboxes may include security issues . 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 staff who are a novice to the financial institution or an outsourced contractor . The details from the lockbox gives you all crucial components to produce a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to decreasepricing per transaction and provide an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox gives you one destination to hold All of your incoming electronic payments meant for faster cash application .
Eliminates mail float
Mail float is a term for the time required for a check to go from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is rapidly turning check here into a productof the past . The improvement in electronic payments embracing FinTech Lockboxes with a significant focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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