Advantages of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of business transactions simplifying 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks get 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 cost along with a per line remittance data processing cost. 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 shift to ePayments has elevated the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox often is somewhat costly . Banks commonlyearn a monthly rate as well as a per line fee linked toprocessing payment remittance detail .

Lockboxes can include security concerns . 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 gives you all needed elements to produce a fraudulent check .

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

Standard Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to eradicate manual process and deciding to pay their customers electronically via ACH accounts receivable automation , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose corporations in an economical scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox would be to decreasepricing per transaction and produce an Accounts Receivable automation program to allowcompanies to rapidly clear cash and facilitate access to your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox gives you a single spot for a house All of your incoming electronic payments produced for speedier cash application .
Eliminates 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 increase in B2B payments electronically , mail float is quickly turning into a productof the past . The rise in electronic payments adopting FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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