Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Big provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers generally 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 efficiency. The price of the bank lockbox is typically a monthly fee 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 change 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 could be somewhat high priced . Banks typicallyearn a monthly rate as well as a per line rate linked tohandling payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The data from the lockbox provides all vital components to create a fraudulent check .

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

Traditional Bank Lockboxes Are Causing issues for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard read more . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose corporations in an economical scalable alternative for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox will be to lowerpricing per transaction and provide an Accounts Receivable automation application to helpcompanies to QUICKLY clear cash and improve access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox read more 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 needed for a check to travel from the payer to the payee through the postal service . With the rise website in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments embracing FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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