Benefits of using Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the traditional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients basically use 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 business’ 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 customers A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

Today, we see a big change with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized 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 could be fairly high priced . Banks normallyacquire a monthly rate as well as a per line fee connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The standard bank lockbox still requires a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the financial institution or an outsourced contractor . The details from the lockbox can provide all essential components to produce a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process the payments and remittance information thensend you the information . Your team still must more info key in that data into your ERP to clear the cash .

Standard Bank Lockboxes Are Creating issues for your Customers' AP Department . Businesses are modernizing their AP Department to eradicate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to aidthose corporations in an economical scalable solution for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to lowerfees per transaction and supply an Accounts Receivable automation program to helpbusinesses to QUICKLY clear cash and facilitate access to your more info working capital .

Easy payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments meant for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel 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 increasing amount of electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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