Best thing about Accounts Receivable 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 efficiency.

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Big offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients 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 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 data back to their customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a big shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Pitfalls of a Traditional Bank Lockbox



The lockbox can be relatively expensive . Banks usuallyacquire a monthly fee in addition to a per line rate associated withprocessing payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still takes a decent amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced contractor . The information from the lockbox provides all required components to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an check here increase in email remittance . FinTech solution businesses have bridged the gap to servethose corporations in an economical scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to decreasepricing per transaction and supply an Accounts Receivable automation program to permitorganizations to QUICKLY read more clear cash and facilitate use of your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox gives you a single place to hold ALL your incoming electronic payments meant for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer click here to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increase in electronic payments choosing FinTech Lockboxes with a primary focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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