Benefits from Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been used for processing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers generally use 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 data back to their client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The price 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 big shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox can be fairly expensive . Banks commonlyacquire a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The data from the lockbox gives you all required elements to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses here have bridged the gap to servethose firms in a cost efficient scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is usually to reducepricing per transaction and website supply an Accounts Receivable automation program to letbusinesses to rapidly clear cash and improve use of 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 data . The AR Lockbox provides you with a single location to hold ALL your incoming electronic payments meant for speedier 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 by way of the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with a significant focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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