Features of Accounts Receivable Automation

accounts receivable automation

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

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

Clients basically leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically 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 cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a huge number of checks over time can be costly with a lockbox.

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

Disadvantages of a Traditional Bank Lockbox



The lockbox can be relatively expensive . Banks typicallyearn a monthly fee along with a per line fee connected withhandling payment remittance detail .

Lockboxes may include security issues . 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 details from the lockbox provides all necessary elements to create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to servethose firms in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is to decreasecost per transaction and supply an Accounts Receivable automation tool to helpcompanies to rapidly clear cash and improve 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 heading to the vendor portal to download payment information . The AR Lockbox provides you with one place to house All of your incoming electronic payments created for faster 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 via the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a productof the past . The rise in electronic payments embracing get more info FinTech Lockboxes with a primary focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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