Attributes of Accounts Receivable Automation

accounts receivable automation

Are you aware of the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and much of the traditional bank lockbox's life has been utilized for processing payment data associated with payments made by check. Big provided this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Customers generally leverage 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 business’ Days Sales Outstanding (DSO). Banks get 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 customers A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox is often relatively high priced . Banks usuallyacquire a monthly fee along with a per line rate linked tohandling payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The details from the lockbox provides all vital components to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing a Problem for your Customers' AP Department . Corporations are modernizing their AP Department to get rid of manual task and opting 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 businesses have bridged the gap to assistthose firms in a cost efficient scalable option for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox would be to decreasefees per transaction and provide an Accounts Receivable automation tool to permitbusinesses to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one place. Instead of here flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single place to house ALL your incoming electronic payments made for quicker 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 through the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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