Features of Accounts Receivable Automation

accounts receivable automation

Are you aware of the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by organization 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 provided this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers generally leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to reduce 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 data back to their client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a drastic shift with Accounts Payable Departments paying electronically. This shift 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 often is fairly expensive . Banks normallyearn a monthly rate as well as a per line fee linked tohandling payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still requires a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced contractor . The information from the lockbox provides all necessary components to produce a fraudulent check .

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

Standard Bank Lockboxes Are Creating issues for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual process and deciding 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 organizations in an economical scalable alternative for automating Accounts Receivable get more info .

Benefits of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox will be get more info to reducecost per transaction and provide an Accounts Receivable automation program to allowcompanies to QUICKLY clear cash and facilitate access to your working capital .

Simple payment trail
It is easy to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with one place to house ALL your incoming electronic payments meant for speedier cash application .
Removes mail float
Mail float is a term for the time required 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 swiftly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with a primary focus here on the cost reduction and speed in which you clear cash and apply it to your working capital .


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