Best things about 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 efficiency.

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients basically 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 assists 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 customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

Today, we see a huge shift 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.

Pitfalls of a Traditional Bank Lockbox



The lockbox can be rather costly . Banks commonlyearn a monthly rate as well as a per line rate associated withprocessing payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still takes a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank check here or an outsourced contractor . The data from the lockbox gives you all essential components to produce a fraudulent check .

Lockboxes don’t tie into your accounting program . Bank lockboxes process your payments and remittance data thensend you the information . Your team still must input that information into your accounts receivable automation ERP to clear the cash .

Commercial Bank Lockboxes Are Creating problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose firms in an economical scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox would be to decreasepricing per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox gives you a single destination to hold All of your incoming electronic payments created for faster cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The rise in electronic payments choosing FinTech ar automation solutions Lockboxes with a major focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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