Advantages of Accounts Receivable Automation

accounts receivable automation

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

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

Customers basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce mail delivery time, which also helps with lowering the business’ 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 clients A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a huge number of checks over time can be expensive with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 often is relatively expensive . Banks generallyacquire a monthly rate in addition to a per line rate associated withprocessing payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still takes a fair amount 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 contractor . The details from the lockbox provides all vital elements to create a fraudulent check .

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

Traditional Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual process and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose businesses in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to reducecost per transaction and provide an Accounts Receivable automation application to allowbusinesses to QUICKLY more info clear cash and facilitate use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you one location to house ALL your incoming electronic payments meant for speedier cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The improvement in electronic payments embracing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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