Benefits of using Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the traditional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company 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 assists 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 price of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox is usually somewhat expensive . Banks normallyearn a monthly rate along with a per line rate connected withhandling payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still requires a decent website measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced contractor . The details from the lockbox can provide all needed components 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 data into your ERP to clear the cash .

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department get more info . Businesses 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 the gap to helpthose companies in a cost efficient scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to lowercost per transaction and produce an Accounts Receivable automation program to allowbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single location to house ALL your incoming electronic payments created for faster click here cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a thingof the past . The rise in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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