Best thing about 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 efficiency.

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Customers basically 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 assists 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 cost of the bank lockbox is usually a monthly fee 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 drastic shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech industry 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 high priced . Banks usuallyacquire a monthly rate along with a per line fee connected tohandling payment remittance detail .

Lockboxes can contain security concerns . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced contractor . The information from the lockbox provides all crucial elements to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to servethose organizations in an economical scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox would be to decreasecost per transaction and produce an click here Accounts Receivable automation program to allowcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one location. Instead of flipping through remittance emails or heading to the vendor click here portal to get payment data . The AR Lockbox provides you with one destination to house All of your incoming electronic payments created for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by means of the postal service . With check here the increase in B2B payments electronically , mail float is quickly becoming a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with an essential focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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