Reasons for AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce 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 customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be pricey with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually fairly costly . Banks normallyearn a monthly fee as well as a per line fee connected withhandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced service provider . The details from the lockbox gives you all needed components to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process click here and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods website of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose businesses in an economical scalable option for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to lowercost per transaction and produce an Accounts Receivable automation tool to helpcompanies to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
You can easily track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox provides you with one place to hold ALL your incoming electronic payments produced for more rapid cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the here cost reduction and speed at which you clear cash and apply it to your working capital .


Leave a Reply

Your email address will not be published. Required fields are marked *