Best thing about 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 a lot of the traditional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers basically 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 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 productivity. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox is often relatively expensive . Banks generallyacquire a monthly rate as well as a per line rate associated withprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still requires a decent amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The details from the lockbox provides all vital 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 enter that information into your ERP to clear the cash .

Traditional Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods ar automation solutions 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 .

Advantages of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to decreasefees per transaction and provide an Accounts Receivable automation tool to letcompanies to rapidly clear cash and facilitate 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 download and read payment data . The AR Lockbox gives you a single place to house All of your incoming electronic payments meant for swifter cash application .
Eliminates 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 quickly becoming a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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