Important things 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 efficiency.

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers 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 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 client. 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 usually 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 shift 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.

Downsides of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks usuallyearn a monthly fee as well as a per line rate connected tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all necessary components to create a fraudulent check .

Lockboxes don’t get more info tie into your accounting system . Bank lockboxes process your payments and remittance information thenforward you the information . Your personnel still must enter that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Companies 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 more info bridged the gap to helpthose organizations in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox would be to reducepricing per transaction and supply an Accounts Receivable automation application to alloworganizations to rapidly clear cash and improve use of your working capital .

Simple payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one spot for a hold ALL your incoming electronic payments meant for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on more info the fee reduction and speed in which you clear cash and apply it to your working capital .


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