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 organization Accounts Receivable departments to increase efficiency.

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

Customers basically leverage 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 data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. 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 shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually somewhat high priced . Banks usuallyacquire a monthly rate in addition to a per line fee related toprocessing payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced service provider . The information from the lockbox can provide all required components to generate a fraudulent check .

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

Financial Institution Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to remove manual task and preferring to pay their customers 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 option for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The main check here goal of the FinTech Lockbox would be to decreasefees per transaction and provide an Accounts Receivable automation program to letorganizations to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you one spot for a hold ALL your incoming electronic payments created for quicker 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 through the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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