Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Big offered this benefit to improve effectiveness and flow of business transactions simplifying 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 reduce mail delivery time, which also helps 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 client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a huge change 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.

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually rather costly . Banks typicallyacquire a monthly fee as well as a per line rate connected withhandling payment remittance detail .

Lockboxes can contain security concerns . 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 staff who are a novice to the bank or an outsourced contractor . The data from the lockbox gives you all necessary elements to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating issues for your Customers' AP Department . Organizations are modernizing their AP Department to eliminate manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to servethose organizations in a cost effective scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to reducefees per transaction and supply an Accounts Receivable automation application to allowbusinesses to QUICKLY clear cash and improve use of your working accounts receivable automation capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single place to house All of your incoming electronic payments meant for swifter cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The increase in 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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