Aspects of AR Automation

accounts receivable automation

Are you aware of the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase efficiency.

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been used for processing 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 generally 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 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 data back to their customer. 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 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 trade 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 rate connected withhandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still requires here a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The details from the lockbox can provide all essential elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and opting to pay read more their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose organizations in a cost efficient scalable option for automating Accounts Receivable .

Benefits 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 application to letcompanies to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Instead of 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 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 here in B2B payments electronically , mail float is rapidly becoming a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with an essential focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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