Attributes of Accounts Receivable Automation

accounts receivable automation

Are you aware of the advantages of accounts receivable automation? Traditionally, 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 used for processing payment information associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Customers generally use 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 receive 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 efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a huge amount 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 trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks commonlyearn a monthly fee along with a per line fee accounts receivable solutions related tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual more info data entry attendance being entry level-administrative staff who are new to the bank or an outsourced service provider . The information from the lockbox provides all crucial components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have more info bridged the gap to servethose businesses in a cost effective scalable solution for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox would be to reducepricing per transaction and supply an Accounts Receivable automation tool to allowbusinesses to QUICKLY clear cash and improve use of your working capital .

Easy 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 and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments made for swifter 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 by way of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The increase in electronic payments adopting FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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