Best thing about AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers generally leverage 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 get the paper check, process it along with the remittance data and send the information 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 typically a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a big change 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.

Disadvantages of a Traditional Bank Lockbox



The lockbox could be somewhat expensive . Banks normallyacquire a monthly rate as well as a per line rate linked tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still takes a fair level 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 data from the lockbox can provide all required elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to remove manual task and opting 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 companies have bridged the gap to helpthose businesses in an economical scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The more info major goal of the FinTech Lockbox will be to decreasecost per transaction and produce an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with one destination to house ALL your incoming electronic payments made for speedier 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 the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the fee 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 *