Important things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Big offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically 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 assists 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 customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The price 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 industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox often is rather high priced . Banks normallyearn a monthly rate along with a per line rate connected toprocessing payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a decent level of manual re-keying information here . With the majority of manual data entry attendance being entry level-administrative employees who are new to the financial institution or an outsourced contractor . The data from the lockbox gives you all needed components to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged here the gap to supportthose companies in a cost effective scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox would be to decreasecost per transaction and produce an Accounts Receivable automation application to letcompanies to QUICKLY clear cash and facilitate use of your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to hold All of your incoming electronic payments produced for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee via the postal service . With the rise in B2B payments electronically , get more info mail float is swiftly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a primary focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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