Great things about Accounts Receivable Automation

accounts receivable automation

Are you aware of the benefits 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 a lot of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients basically use 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 receive the paper check, process it along with the remittance data and send the information 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 fee along with a per line remittance data processing cost. To process a large amount of checks over time can be pricey with a lockbox.

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

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks usuallyearn a monthly rate in addition to a per line fee associated withprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still get more info requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The information from the lockbox provides all essential elements to generate a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process the payments and remittance information and thenforward you the information . Your personnel still must enter that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Causing difficulty 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 generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose companies in an economical scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


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

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox gives you a single spot for a house ALL your incoming electronic payments created for speedier cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increase in electronic payments using FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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