Features of AR 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 expediency.

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's life has been used for processing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients generally 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 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 efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge number of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks normallyearn a monthly fee in addition to a per line fee related toprocessing payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still takes 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 required elements to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament click here for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and opting to pay their here customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to assistthose businesses in a cost effective scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is usually to decreasecost per transaction and produce an Accounts Receivable automation program to permitcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track click here incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one destination to hold All of your incoming electronic payments meant for swifter cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments adopting 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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