Features of AR Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by company Accounts Receivable departments to increase efficiency.

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers generally use 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 assists 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 typically a monthly fee along with a per line remittance data processing fee. To process a huge amount of checks over time can be expensive with a lockbox.

Today, we see a big 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.

Downsides of a Traditional Bank Lockbox



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

Lockboxes may include security concerns . The standard bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The information from the lockbox gives you all vital elements to make a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process the payments and remittance information thenforward you the information . Your personnel still must input that information into your ERP to clear the cash .

Standard Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically website via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose companies in a cost efficient scalable alternative for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox is usually to decreasefees per transaction and supply an Accounts Receivable automation application to permitcompanies to rapidly clear cash and improve 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 heading to the vendor portal to download and read payment data . The AR Lockbox gives you a single spot for a hold All of your incoming electronic payments made for faster cash application .
Eliminates 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 rapidly becoming a productof the past . The improvement in electronic payments choosing FinTech Lockboxes with an essential focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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