Benefits from Accounts Receivable Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by company Accounts Receivable departments to increase expediency.

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Mainstream offered this benefit 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 purposefully placed in a central location to decrease 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 information back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox is often somewhat expensive . Banks generallyearn a monthly fee along with a per line rate connected withprocessing payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The details from the lockbox provides all needed elements to generate a fraudulent check .

Lockboxes don’t tie 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 .

Traditional 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 clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is usually to reducefees per transaction and produce an Accounts Receivable automation application to helpbusinesses to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox gives you one destination to house ALL your incoming electronic payments produced for faster cash application .
Removes 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 , mail float is quickly becoming a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed in read more which you clear cash and apply it to your working capital .


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